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Feature Article

Highlights: Harrison’s Complete UAD Guide
by Henry S Harrison

As of September 1st, 2011, appraisers will be required to make some significant changes in the way they prepare the URAR because Fannie Mae, Freddie Mac, FHA, and the VA are going to require all appraisal reports be transmitted electronically in a standardized format. All URAR appraisal reports with an effective date on or after the first of September submitted to Fannie Mae or Freddie Mac will have to meet the new Uniform Appraisal Dataset (UAD) standards (and shortly for FHA and VA too).

The UAD requirements have been designed to allow appraisers to make appraisals that comply with the USPAP, and include everything the appraiser believes is necessary to make a credible appraisal as required by the USPAP. Appraisers should start making appraisals that meet UAD standards as soon as possible. To meet these highly specific requirements, they will need a form-fill input program sold by an approved software vendor. The software dealers in the appraisal industry are gearing up to make their program output coincide with the UAD requirements, and have it available soon so that appraisers have sufficient time to learn how to use the new UAD format.

The UAD is highly specific about the style, format and presentation of all data entered on the URAR. The biggest change, in my opinion, is that appraisers will no longer be able to use qualifiers such as “poor”, “fair”, “good” or “very good” in their property quality and condition ratings. Under UAD, only six quality ratings are feasible: Q1, Q2, Q3, Q4, Q5 or Q6. Similarly, six precise condition ratings are provided: C1, C2, C3, C4, C5 or C6. Each of these ratings is defined by the UAD guidelines, and appraisers are not permitted to modify them with plus “+” or minus “-” signs, or any other modifier.

Ask Henry

UAD Updates and Corrections

Dear Henry,

I am going to take advantage of your COMBO offer and order your new Complete UAD Guide and the Illustrated Guide to the URAR form. However...I noticed that the UAD is already being revised. How will you handle that? Will you be emailing updates, blogging about them or what? I realize it is our responsibility to stay up on this; however you might have a great sales tool if you promised to cover all updates on your website or send something by email to us. I have a fear of missing something if it is only up to me to track this monster coming in September! I don't underestimate what a big change this will mean for us appraisers.

Alisa McKeel Willson
CA State Certified Appraiser

Dear Alisa,

You are quite right in assuming that there will be corrections and updates to the UAD instructions. I am putting the final touches on my Complete UAD Guide now. I've already found many inconsistencies between Fannie Mae's Addenda D and Addenda A, which I think they will have to resolve. Other problems will no doubt be uncovered as the UAD is analyzed, considered, added to software packages, and implemented.

Since UAD updates and corrections appear to be a certainty, you'll be glad to know that we do plan to publish all updates to my Complete UAD Guide as they are released, on our Real Estate Valuation Magazine & BLOG. All subscribers will receive email notifications of these changes when they've been posted. (Subscriptions to REV Magazine Online are free. The update link is at the top of the righthand column.)

I'm frankly surprised by how many of our readers seem to be oblivious regarding this major Fannie Mae-Freddie Mac initiative. They apparently do not realize yet just how complex the UAD requirements are, which go into effect for all Fannie Mae & Freddie Mac URAR appraisals with effective dates from September 1, 2011 on.