David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
David Smith | Compass Real Estate logo
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Home Selling

The New Home Appraisal Report: What Houston Buyers and Sellers Should Know About UAD 3.6

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Let's Talk Strategy

If you're buying or selling a Houston home with a conventional mortgage this winter, the appraisal is about to look different. Fannie Mae and Freddie Mac are replacing the appraisal forms lenders have used for years with a new report built on UAD 3.6 (the Uniform Appraisal Dataset). I sat in on an appraisal webinar for agents, then checked the details against the agencies' own documents.

The short version: the new report changes how an appraiser records and presents your home. Fannie Mae and Freddie Mac haven't said it raises or lowers values. Comparable sales still matter most, the same way I explain in my Houston pricing guide.

Dates below are current as of October 2026 and can change. The agencies set them, and each lender may move on its own schedule.

What's changing in the appraisal report

One report instead of many forms

Appraisers used to pick a form by property type, like the 1004 for a house or the 1073 for a condo. Fannie Mae's UAD 3.6 FAQ says those forms are being retired for one data-driven report. Form numbers go away, and the property's own details decide which sections appear.

The General Addendum at the end goes away too. Comments now sit inside the section they relate to, so a note about your kitchen shows up with the kitchen.

The summary page and how repair items are listed

The new report opens with a summary page. In Fannie Mae and Freddie Mac's sample reports, it shows the opinion of value and how the property was appraised, next to the overall quality and condition ratings. Property basics sit in one block, such as whether the home is attached and whether it's in a PUD or condo.

Repair items now get their own lines. Each line covers:

  • The feature and where it is
  • A short description
  • Whether it affects soundness or structural integrity
  • The recommended action

In the samples, items that need action also show an estimated repair cost, on the summary page and again in reconciliation.

Condition and quality ratings

Condition still runs from C1 (best) to C6, and two of the top ratings now have clear time limits:

  • C1: the home is 100% newly built, completed within the past 12 months. It has never been occupied and shows no wear.
  • C2: the home is like new. Either it was built within the past 36 months and has since been lived in, or it was fully remodeled "to the studs" with new major components. It has no deferred maintenance.

So a full remodel finished four years ago may not rate C2, because it's outside the 36-month window. A partial update, like a new roof or a remodeled kitchen and baths, falls under C3 in the official definitions.

The appraiser also rates condition and quality for the interior and the exterior separately, alongside an overall rating. Fannie Mae says this helps show when the inside and outside differ a lot, so a dated exterior on an updated home may now show up on its own instead of being folded into one rating. The report also records whether kitchens and baths were updated, and roughly when.

Square footage by the ANSI standard

Appraisers measure using the ANSI Z765-2021 standard. This isn't new with UAD 3.6. Fannie Mae has required it since April 2022 and removed the last opt-out in 2025. Under the standard, finished space needs a ceiling of at least 7 feet. In a room with a sloped ceiling, at least half the finished area must be 7 feet or taller, and nothing under 5 feet counts. Space that's partly or fully below ground is counted separately from above-grade living area.

Fannie Mae also says MLS and tax-record square footage may not have been measured this way, and appraisers can't follow local custom instead. The number on the listing may not match the appraisal. Two I run across a lot are attic conversions and garage conversions. The sloped ceilings in a converted attic are where the ceiling-height rules can cut the square footage that counts. With a converted garage, the smart step is to have your permits and records ready, and ask the appraiser how they'll report the space.

The timeline (current as of October 2026)

For conventional loans sold to Fannie Mae and Freddie Mac:

  • November 2, 2026: UAD 3.6 is required for new appraisal reports submitted on or after this date. The agencies say this date isn't changing.
  • November 2, 2026 to May 19, 2027: lenders that requested and received a temporary exception can keep using the older format. This is lender by lender, not automatic.
  • March 1, 2027: older-format reports from those lenders lose some protections in the agencies' review.
  • May 20 to June 27, 2027: every new appraisal must use UAD 3.6. Older-format reports are accepted only as revisions of reports already submitted.
  • June 28, 2027: the older format is fully retired.

For government loans:

  • FHA: since October 1, 2026, FHA accepts either format and hasn't set a required date.
  • VA: VA hasn't announced a date to adopt the new report.

Either way, ask your lender which format they're ordering for your loan.

What it means for sellers

Clear, dated records make it easier for an appraiser to support when an update happened and how far it went. It isn't a requirement, just a smart step. Before you list, consider gathering:

  • A dated list of improvements (for example, "2022: HVAC replaced" instead of just "updated")
  • Invoices and receipts
  • Permits, where the work needed them
  • Before-and-after photos
  • The age of your roof and water heater

I also like to walk the home with you before the appraisal and take care of the easy fixes. I'll share your records with the appraiser along with the comparable sales I used to price your home.

What it means for buyers

Plan for a little more time. NAR suggests assuming appraisals may take longer during the transition, and a Fannie Mae manager speaking to Texas REALTORS® in September said the first few reports may run slower. I'll build a modest cushion into your option and financing dates when I write your offer.

Read page one first. Any repair items that need action show up on the summary page, so you can see them early. If the square footage comes in below the listing, we'll look at how the comparable sales were measured and walk through the report together.

One more question I'm hearing

Is the new report used outside of mortgages?

It's built for mortgage lending. Fannie Mae's FAQ says its purpose hasn't changed: evaluating a home for a mortgage transaction.

Let's talk before your appraisal

I've been licensed since 2004, with 260+ home sales and $78M+ along the way. If you're buying or selling in Houston and want help getting ready for the new report, call or text me at (346) 569-2583.

David Smith, REALTOR® | Broker Associate with Compass

Sources

This post is general information, not lending or legal advice. Talk to your lender about your loan.

David Smith with Compass | Compass RE Texas, LLC (Corp Lic# 9006927-BB).

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