Larry Saunders

Effective September 1, Fannie Mae and Freddie Mac are requiring all new appraisals to be subject to the new UAD format. Government agencies certainly love using acronyms. UAD stands for Uniform Appraisal Data which is an attempt to standardize appraisals so that the information in appraisals is more consistent across the board.

Bathrooms will be coded differently in this new format. If the house has one full bath and one half bath, the appraisal will not show the property as having 1.5 baths. It will be listed as 1.1 baths. The number to the left of the decimal will be the number of full baths and the number to the right of the decimal will be the number of half baths. If the house has 2 full and 2 half baths, it will be shown on the report as having 2.2 baths.

For property condition, previously property was listed as good, average, or poor. The new condition rating will be coded as C-1 (the best) to C-6 (the worse). I’m told that lenders will mostly like not finance properties rates C-5 and C-6 but we won’t know for sure until we have some experience with this new coding.

The type of home will be more specific on the new reports. Old descriptions like “single story” or “two-story” will be replaced with more specific types of design like ranch, colonial, contemporary, etc. This will make it clearer that the appraiser is comparing the subject property to comparable homes that are, well… comparable.

Appraisers will be required to report the square footage of basements whether they are finished or not. I’m glad to see this as I think it will help with consistency across reports.

I expect there will be an adjustment period as appraisers get used to completing these new reports and bank underwriters get used to reviewing them. I anticipate there will be some potential updates and revisions bank underwriters will require of the appraisers and this might add some extra time to get loan approved. If your home financing requires an appraisal, it would be wise to plan on the approval process to take a little longer as everyone learns to work this this new appraisal format.

Larry Saunders
Mortgage Loan Officer
Mobile (434) 466-5662
Mahone Mortgage, LLC