Why Lender Readiness for UAD 3.6 & Redesigned URAR Matters to Appraisers

Hi, I'm Daniel Yoder, a residential appraiser. Like many of you, I'm closely following the developments around the Uniform Appraisal Dataset (UAD) 3.6 and the redesigned Uniform Residential Appraisal Report (URAR). While much of the focus has been on how these changes impact our workflows, it's equally important to understand how our lender clients are preparing for this significant transition. Their readiness directly affects how we interact with them, receive orders, and deliver our reports, especially with the Limited Production Period (LPP) kicking off on September 8, 2025.

Why does lender readiness matter to us as appraisers? Simply put, lenders aiming to participate in the LPP, and eventually adopt UAD 3.6 broadly, need to overhaul various internal systems and processes. They must ensure their operational workflows, technology platforms, and vendor partners – including appraisers and AMCs – are fully aligned with the new standards before they can start using the redesigned URAR in a production environment. This preparation phase for lenders has downstream implications for our daily work.

Key Lender Readiness Areas Impacting Appraisers

Based on guidance like the GSEs' Lender Readiness Kit, lenders are focusing on several key areas. Here’s what appraisers should be aware of:

1. Operational Shifts: Lenders are evaluating impacts across their business units:

   • Loan Origination: Lenders need to train staff to understand property characteristics without relying on legacy form numbers. This shift, detailed in posts like "Saying Goodbye to Form 1004", means appraisers must be adept at using the new data-driven URAR structure. We might also see adjustments in how appraisal fees are handled on the Loan Estimate (LE) and Closing Disclosure (CD) as lenders adapt their pricing structures.
   • Order & Receive Appraisal: Expect potential updates to Engagement Letters reflecting the new UAD scope and lender overlays. Lenders and AMCs will likely place greater emphasis on appraiser competency, especially regarding the expanded property types covered by the single URAR. A crucial step for lenders is confirming the appraisal received matches the requirements ordered, requiring them (and us) to understand how to read the new dynamic report format. Furthermore, lenders will rely heavily on the modernized Uniform Collateral Data Portal (UCDP) and the redesigned Submission Summary Report (SSR) for feedback and exception handling, as noted in the Lender Kit overview.
   • Loan Delivery & Servicing: For lenders involved in correspondent lending, understanding SSR requirements, including message severity, becomes critical. They also need to align with ULDD Phase 5 data points. While less direct, these backend requirements reinforce the need for accurate and compliant appraisal data from the outset.
   • Other Impacts (Training, Vendor Management): Lenders are coordinating extensively with all their partners – Loan Origination Systems (LOS), appraisal firms, AMCs, UCDP Direct Integrators, and MI companies. They are also undertaking significant employee training. This highlights the ecosystem-wide nature of the change; appraisers are a key part of this coordination.

2. Technology Readiness: Lenders must verify that their LOS providers have implemented the necessary system enhancements to accept and process UAD 3.6 data. They are conducting workflow and process testing with vendors. For appraisers, this means ensuring your appraisal software is updated and compliant. Lenders will expect appraisers and their software vendors to utilize tools like the new UAD Compliance API to check data compliance before submission. Efficient data collection tools become even more valuable in this context; solutions like Valuemate, which automate floor plan generation and data entry, could assist appraisers in meeting these new technological expectations.

3. Training and Education: The Lender Readiness Kit emphasizes the need for lenders to use industry training to educate their staff. The GSEs are rolling out training specifically for the new URAR starting in Q4 2024, focusing on how to read the reports and interpret the data. Appraisers must prioritize this training as well to ensure alignment with lender expectations and understanding.

The Limited Production Period (LPP) Factor

The LPP, running from September 8, 2025, through January 25, 2026, is the first opportunity for approved lenders to use the new UAD 3.6 and URAR in their live production environment. If you work with lenders participating in this early adoption phase (LPP), you'll need to be ready significantly sooner than the broader mandate.

Lenders in the LPP benefit from "hands-on, high-touch support" from the GSEs. While this support is aimed at lenders, it implies a collaborative environment where issues identified during early adoption can be addressed more quickly, potentially benefiting the appraisers working with these pioneers.

What Appraisers Can Do Now

Understanding that your lender clients are navigating these complex changes, here are proactive steps you can take:

• Communicate: Talk to your primary lender and AMC clients. Ask about their UAD 3.6 implementation timeline and whether they plan to participate in the LPP. Understanding their plans helps you prioritize your own preparation.
• Self-Assess: Ensure your appraisal software vendor is on track for UAD 3.6 compliance. Review your own workflows – how will you handle ordering without form numbers? How will you ensure data accuracy for the expanded fields?
• Prioritize Training: Stay informed about the GSE training schedule (starting Q4 2024) and plan to complete it promptly.
• Embrace the Data: Continue familiarizing yourself with the shift from form-centric to data-centric reporting. Understand how specific data points now drive the structure and content of the URAR, especially for atypical properties.

By understanding the preparations lenders are making, we can better anticipate their needs and expectations. This awareness facilitates smoother collaboration and ensures we are ready to deliver compliant, high-quality appraisals when our clients transition to UAD 3.6, whether during the LPP or upon broader adoption.