How Home Appraisals Are Changing and What Buyers, Sellers, and Realtors Need to Know

The home appraisal is undergoing its biggest change in over a decade, and it centers on how property information is reported rather than how homes are valued. Starting November 2, 2026, all new appraisal reports delivered to Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) must use the Uniform Appraisal Dataset (UAD) 3.6, a redesigned digital standard that replaces more than a dozen static paper-era forms with one dynamic report built on standardized data fields (FHA on UAD 3.6).

The shift cuts both ways for buyers, sellers, and Realtors in Montana, and everywhere else. Standardized, structured property data can make reports more consistent and easier for lenders and underwriting systems to review, which may support faster, smoother closings (Fannie Mae on UAD 3.6). But the transition carries real costs of its own: appraisers must learn new software, enter far more data, and absorb new technology fees, and early data suggests those costs are flowing through to consumers as higher appraisal fees (NMP report on UAD 3.6 fees).

Here is what UAD 3.6 actually changes, why the agencies pushed for it, what appraisers now have to do versus what they used to do, and how the cost shift lands on buyers and sellers everywhere.

What is UAD 3.6 and what does it change?

UAD 3.6 is the newest version of the Uniform Appraisal Dataset, the standardized way property data is defined and delivered to Fannie Mae and Freddie Mac. It replaces the legacy paper-era forms with a single dynamic Uniform Residential Appraisal Report (URAR) that adapts to the property type and uses structured fields, drop-downs, and conditional sections instead of long free-text narratives (Fannie Mae on the UAD transition). The old standard was built around fixed forms like the familiar Form 1004, a static four-to-six-page document (NAN guide to UAD 3.6).

Why the change? Fannie Mae and Freddie Mac hold roughly $7 trillion in mortgage debt between them, backed by U.S. taxpayers, and they see UAD 3.6 as a way to manage the risk in that portfolio more precisely. Lyle Radke, Fannie Mae's senior director of collateral policy, put it plainly: collecting more standardized data is essential because it is how the agencies manage risk, and it makes the data easier to see and understand (Working RE interview with Fannie Mae). The old 2.6 format relied on fixed forms with coded abbreviations and checkboxes; UAD 3.6 uses a flexible, dynamic structure that adapts to property type, loan type, and scope of work (NAN guide to UAD 3.6).

The mandate applies to conventional conforming loans sold to Fannie Mae and Freddie Mac, with all new appraisal report submissions to the Uniform Collateral Data Portal (UCDP) required to use UAD 3.6 beginning November 2, 2026 (Fannie Mae on the transition).

What should sellers do to prepare?

For sellers, the biggest practical change is what it now takes for an appraiser to produce the report. Where UAD 2.6 ran on a four-to-six-page fixed form that appraisers could complete largely from experience, the new URAR runs roughly 25 to 30 pages and carries about 900 data elements, compared with roughly 190 in the old format (NAN guide to UAD 3.6). The general addendum is gone; appraisers now enter commentary field by field, section by section, and capture condition and quality ratings separately for interior and exterior.

That heavier workload has shown up in the price of the appraisal itself. NAMB president Michael Farrell told Scotsman Guide that older-format appraisals are typically priced around $550, while reports completed under UAD 3.6 may cost closer to $850, because appraisers need updated software and training and must spend more time at the property (Scotsman Guide on UAD 3.6 costs). He also expects the new reports to take an additional three to five days to prepare. The higher cost is not a one-time transition surge; it reflects the permanent structure of the new standard, which demands far more data entry, longer reports, and appraiser software that carries its own recurring cost.

Expect that cost to reach Montana transactions, and to stay there. Appraisal fees are typically passed through to the borrower as part of closing costs, which means it is usually the buyer who pays the appraisal fee in a Montana purchase, rather than the seller. A home purchase that closes after November 2 will carry a higher appraisal line item than one completed earlier in 2026 (Scotsman Guide on UAD 3.6 costs). This is not limited to any one city or lender. The mandate applies to every lender originating conventional loans sold to Fannie Mae and Freddie Mac, and the FHA has adopted the same UAD 3.6 format for its insured mortgages (FHA on UAD 3.6). Buyers and sellers should treat a higher appraisal cost as the new normal, not a temporary bump.

What should buyers know about closing timelines and eligibility?

For buyers, the biggest practical change is how the appraisal is ordered, reviewed, and delivered, which affects closing timelines and what information is available during the transaction. Standardized, structured property data can make reports consistent and easier for lenders and underwriting systems to review, which may support smoother closings.

Starting November 2, 2026, lenders must submit all new appraisal reports using UAD 3.6, so a home purchase that relies on conventional financing will move through the new format (Fannie Mae on the UAD 3.6 mandate). The same applies to FHA loans: HUD states that FHA is adopting the UAD 3.6 format and that all appraisals for FHA-insured mortgages must be reported on the UAD 3.6 forms and submitted through the Electronic Appraisal Delivery (EAD) portal (HUD on FHA UAD 3.6). After that date, only revisions of previously submitted UAD 2.6 appraisals may use the old format; all new UAD 2.6 submissions will be rejected.

The early data also points to longer turnaround times during the transition. Clear Capital said turn times have increased given the learning curve, even as appraisers get faster with experience, and the company reported appraisers completing UAD 3.6 reports about 28 percent faster once familiar with the new requirements (NMP report on UAD 3.6 fees). For a buyer, that may mean the appraisal takes a little longer and costs a little more in the months around the transition, before settling down as appraisers and software mature.

Why does the local market matter?

UAD 3.6 does not remove judgment; it shifts how that judgment is expressed and reviewed. The appraiser still selects comparables, applies adjustments, and forms the opinion of value, but now delivers that analysis through standardized, machine-readable data that lenders and automated systems can evaluate more consistently.

For Montana, the practical effect is less about the homes themselves and more about the professionals who serve them. Local appraisers across the state must now carry new GSE-approved software, absorb the cost of training and data entry, and adjust to a report that runs far longer than the forms they have used for years. Fannie Mae explicitly tells appraisers to evaluate software costs and learning curves as they choose a package (Fannie Mae Appraiser Update). In a smaller market like Montana, where appraiser volume is thinner across many communities, those fixed costs may be harder to spread across many assignments, which could keep upward pressure on local fees.

Buyers and sellers across Montana should plan for a transition that takes time to settle. The new report introduces more than 150 new data points for appraisers to complete, and industry voices describe it as taking much more time, more research, increased software fees, and increased liability (Working RE on the fee struggle). None of this changes how a home is valued. It changes the work required to document that value, and that work now costs more.

The bottom line

The move to UAD 3.6 is real, and by November 2, 2026, it will govern every new appraisal report delivered to Fannie Mae, Freddie Mac, and the FHA. It is a shift toward more consistent, structured property data, but the fundamentals of how a home is valued, market value, comparable selection, and adjustment logic, are unchanged.

The takeaway for everyone in a Montana transaction, and across the industry, is straightforward: the reporting format is changing, and with it the time, software, and fees that go into an appraisal. Buyers should budget for an appraisal that may now cost $850 or more, and treat that higher cost as the new normal rather than a temporary bump. Sellers should be ready to help the appraiser document the property accurately in the new structured fields. And everyone should expect the industry to keep adjusting as appraisers and their software mature through 2027.

A note on market conditions

Market conditions and economic forecasts are subject to change. Information presented is based on third-party sources believed to be reliable as of the date referenced and is provided for general informational purposes only. Guild Mortgage does not guarantee future interest rates, housing-market conditions, property values, or economic outcomes.

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Written by Nicole Hanni, Branch Manager, NMLS# 487293.