Real Estate Appraiser Specializing in Commercial Industrial Residential Income Land & Single Family Residential Properties Existing or Proposed Construction Estate & Gift Tax Conservation Easements Partial Values Fractional Interests Former Senior Appraiser United States Treasury Department IRS Large Business and International Division California General Certified Real Estate Appraiser FHA Approved

Michael F. Ford #AG002512

 

Completing The URAR Report Using the FNMA / Freddie Mac Required Uniform Appraisal Datasets (UAD) Format

May 15, 2011

UAD and the URAR

Some readers may prefer to skip over the text paragraphs that follow and go directly to the link to FannieMae at the bottom of this page.

The Federal Housing Finance Agency (FHFA) in partnership with Fannie Mae and Freddie Mac has adopted new appraisal report regulations. 

Reason?  "To improve the quality and consistency of appraisal data on loans delivered to the government - sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA)"... have adopted the Uniform Appraisal Dataset (UAD) form reporting requirement. The UAD defines all fields required for an appraisal submission for specific forms and standardizes definitions and responses for a key subset of fields.

Like it or not, the new form reporting format presents two particular challenges to us as appraisers.

  1. To insure that third-party directed, and defined entries are made in a report that is still fully USPAP compliant, and
  2. To insure ALL intended users, including lay-person owners and others who are not lending professionals can still easily understand these new coded entries.

As of September 1, 2011 appraisers are required to make significant changes in the way they prepare the URAR appraisal report for FNMA, Freddie Mac and probably FHA and VA.  As of September 1, 2011 all FNMA and Freddie Mac submissions must meet the new UAD requirements.  When FHA and VA will also make this effective is unknown.  We must not assume they will abandon plans to implement this mortgage industry dictated reporting plan, although that is still a reasonable hope.

In the interim, we must now quantify reporting data exactly as prescribed by the bureaucrats, and as directed by a purely self-interested mortgage industry.

How this will comport to our requirement to provide reports that are not misleading remains to be seen. My own tentative plan at this stage is to add huge amounts of addenda to explain each of the dataset ratings.

I will also increase my fees commensurate with the additional time required to meets this new 'industry standard'.

The most significant change appears to be the elimination of traditional ratings used by appraisers such as "poor", "fair", "good", "very good" and "excellent" for quality and condition ratings. These terms that are easily understood by clients and the general public at large are to be replaced with ratings of: Q1, Q2, Q3, Q4, Q5, Q6 and C1, C2, C3, C4, C5, C6. Each of these ratings is defined in UAD guidelines and appraisers may not modify them with "+" or "-" sings or any other modifier.

There are three additional required overall ratings: "not updated", "updated" and "remodeled" which are the only permitted selections. Appraisers will be permitted to add addendum comments explaining their thinking and conclusions. While UAD has precise definitions that cannot be modified, nothing in these forbid the appraiser from reporting additional information via addenda that they believe to be relevant. [Expect considerable additional work and time for completion].

Field Formats:

Some fields permit variable text and punctuation entries provided the maximum number of characters is not exceeded.

{String}- Any characters or punctuation allowed but number of characters is limited

{Enumerated}- only specific characters and punctuation permitted

{Time / Dates} - A specific format must be followed

{Numeric}- only numbers without any punctuation are permitted

{Money}- Dollar values can only be entered in a precise manner

{Boolean} - Only "yes" or "no" answers allowed, but the manner they are shown varies. Each Boolean field has specific instructions

Before we go any further, each and every appraiser must now be familiar enough with United States Postal Service (USPS) Publication 28 to insure that they can report the city properly, using no more than forty characters and spaces!

The following is an example of a UAD instruction for a single line on the URAR (taken from Harrison's UAD Guide to the URAR; rev. pub. 03/2011): .

The number '' refers to the page number of the form. The second number '' refers to the item on that page. When it is underlined it refers to a numbered line. When shown as '' it means that the item is inside a checkbox. Some numbers have an 'e' in front of them. The 'e' is not for appraisers. It is for the computer programmers. This should now be as clear as mud, right?

The "(UAD Required) notation at the end of the line means that this is a required item. No variance permitted. If it had read "(UAD Conditionally Required)" it means it is only required when and if the information is available. If there is no instruction at the end of a line, it means that line is optional as far as UAD is concerned.  Some optional lines and instructions may say (UAD Instructions) and these must be followed if you use the line or check box. These lines are used by the appraiser to comply with USPAP requirements to make a credible appraisal.

The second line is the description of what is to be entered.

The third line is the Reporting Format. This is the EXACT instruction on how to complete the line. It starts with the type of line or checkbox shown in brackets: {string} Remember from above? This allows any letters or punctuation but limits the number of characters on the line or in the box. The next item is the number of characters you are allowed to use. Anything more will be chopped off and not be entered into the system. Assume bureaucrats will reject your work if this happens.  Common sense is not their strong point. Do NOT ignore additional instructions such as the USPAP Publication 28 item noted above.

The final line is the consistency check. Make sure you perform this if your software does not do it for you!  IF YOUR DATA IS NOT REPORTED ‘PROPERLY’ FANNIE MAE, et al computers will most likely reject your appraisal in its entirety!

Recap:

#1-7 City (UAD Required)

Enter on this line the city in which the subject is located. (Appendix D)

: {string} 40 characters maximum. 

:  This data is referenced elsewhere on the form (#2-12a, #6-20a) and must be represented consistently.

The above example is a typical entry. Some are more complex. Follow the directions carefully.

The URAR 2005 Revision is still being used, however UAD reporting requirements have ‘changed’ certain traditional entries (UAD Appendix D).

Example:

Lender/Client

Name 22

Company Name 23

Company Address 24

Email Address 26

Enter the name of the appraisal management company (AMC) on this line if the appraisal is ordered through an AMC. If no AMC is involved, enter “No AMC”. (Appendix D)

Enter the name of the party or entity designated as the lender for the loan. (Appendix D).

UAD has specified what computer programmers refer to as fields and appraisers call lines and checkboxes on the URAR form. The limitations on the manner in which data can be entered is not subject to any acceptable variance.  Baths must all be shown as three digit formats. The first number is for full baths, followed by a decimal point and a digit indicating half baths. Therefore 3.2 = three full baths and two half baths. According to UAD three quarter baths are to be shown as full baths; and single fixture bathrooms are ignored – though they may (and should for USPAP compliance) be shown in additional comments or addenda.

The ONLY time commas are permitted is in the {string} formats, or where specifically stated as being permitted. Usually semi colons are used instead as separators.

The following Copy of FNMA’s LL-2010-15 should be helpful

 

Lender Letter LL-2010-15 December 16, 2010

TO: All Fannie Mae Single-Family Lenders

Uniform Appraisal Dataset and Uniform Collateral Data Portal

Introduction

In an effort to enhance appraisal data quality and consistency and promote the collection of electronic appraisal data, Fannie Mae and Freddie Mac, at the direction of their regulator, the Federal Housing Finance Agency (FHFA), have worked together to develop the Uniform Appraisal Dataset (UAD) and the Uniform Collateral Data Portal (UCDP).

This Lender Letter includes an overview of the following:

Fannie Mae and Freddie Mac Uniform Appraisal Dataset requirements

Uniform Collateral Data Portal

Future updates to Fannie Mae policies

The information in this Lender Letter that pertains to the UAD requirements and UCDP is similar to the information being issued concurrently by Freddie Mac. The future updates pertain to Fannie Mae’s policies only and will align the Selling Guide with the UAD requirements.

Fannie Mae and Freddie Mac Uniform Appraisal Dataset Requirements

Fannie Mae and Freddie Mac have created the UAD Specification document to provide business and technical requirements for implementation of the UAD. The UAD includes all data elements required to complete the following appraisal report forms (collectively referred to as the “four UAD appraisal report forms”):

Uniform Residential Appraisal Report (Fannie Mae Form 1004)

Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075)

Exterior-Only Inspection Residential Appraisal Report (Fannie Mae Form 2055)

The UAD also standardizes the input values for certain elements (e.g. specific date and dollar amount formats) and standardizes the definitions for select key appraisal data elements (e.g. property condition and quality of construction) on the four UAD appraisal report forms.

The UAD is required for appraisals with effective dates on or after September 1, 2011 that are completed on the four UAD appraisal report forms. Only conventional mortgages sold to Fannie Mae that are accompanied by one of the four UAD appraisal report forms must meet this requirement.

Lender Letter LL-2010-15 Page 1

Other appraisal report forms may be completed using the standards contained in the UAD Specification to the extent those standards are applicable to that particular form. In addition, although not required, the UAD may be used for appraisal reports with effective dates prior to September 1, 2011.

The UAD Specification may be amended from time to time. The current version of the UAD Specification can be found on eFannieMae.com.

Uniform Collateral Data Portal

On May 1, 2009, Fannie Mae notified lenders in Announcement 09-11, Mortgage Loan Data Requirements, that submission of electronic appraisal data elements would be required for mortgage loan applications dated on or after January 1, 2010. Subsequent to that Announcement, the effective date was postponed and Fannie Mae began working with Freddie Mac, at FHFA’s direction, to develop a common approach to the standardization and collection of appraisal data. As a result of that collaborative effort, the UCDP was developed to serve as the joint portal through which lenders will submit electronic appraisal reports to Fannie Mae (and Freddie Mac).

Effective for all conventional mortgage loans for which an appraisal report is required and with application dates on or after December 1, 2011 and delivery dates on or after March 19, 2012, the following appraisal report forms, including all exhibits, addenda, and photographs, must be submitted to UCDP before the delivery date of the mortgage loan to Fannie Mae. This includes the four UAD appraisal report forms and four additional forms:

Uniform Residential Appraisal Report (Fannie Mae Form 1004)

Manufactured Home Appraisal Report (Fannie Mae Form 1004C)

Small Residential Income Property Appraisal Report (Fannie Mae Form 1025)

Individual Condominium Unit Appraisal Report (Fannie Mae Form 1073)

Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Fannie Mae Form 1075)

Exterior-Only Inspection Residential Appraisal Report (Fannie Mae Form 2055)

Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2090)

Exterior-Only Inspection Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2095)

The submissions to UCDP must consist of either an acceptable Extensible Markup Language (XML) data stream, including an embedded Portable Document Format (PDF) file, or a first-generation PDF file. The PDF file must include all exhibits, addenda, and photographs, including the Market Conditions Addendum to the Appraisal Report (Fannie Mae Form 1004MC). Refer to the UAD Overview on eFannieMae.com for a list of acceptable XML formats.

Lenders may deliver appraisal reports through UCDP as soon as the portal becomes available, which is currently scheduled for June 2011. Fannie Mae will notify lenders when the portal is available.

Appraisal report forms not listed above must not be delivered through UCDP.

Lender Letter LL-2010-15 Page 2 Lender Letter LL-2010-15 Page 3

Future Updates to Fannie Mae Policies

As noted above, the UAD Specification provides standardized definitions for property condition and construction quality. The new definitions are expressed as a rating. Property condition will be rated C1 - C6, and quality of construction will be rated Q1 - Q6. Refer to the UAD Specification; Appendix D, Field-Specific Standardization Requirements; Exhibit 1, Requirements - Conditions and Quality Ratings Usage, for the definitions and for additional information.

The Selling Guide will be updated no later than the required implementation date of the UAD to reflect these standardized definitions. B4-1.4-15, Appraisal Report Review: Property Condition of the Improvements of the Selling Guide, will be updated to indicate that condition ratings C1 – C4 will be eligible for delivery in “as-is” condition. Condition ratings C5 and C6 will be applicable if the appraiser identifies physical deficiencies that affect the soundness, structural integrity, or livability of the subject property. Mortgage loans secured by properties with these ratings will be eligible for delivery, but the required repairs must be completed before the mortgage is delivered to Fannie Mae. Additionally, the Selling Guide will be updated to reflect that mortgage loans secured by properties with construction quality ratings Q1 – Q5 will be eligible for delivery to Fannie Mae, but properties with a quality rating of Q6 will not meet Fannie Mae’s property eligibility requirements.

*****

Lenders who have questions about this Lender Letter should contact their Customer Account Team.

John S. Forlines

Vice President

Single-Family Chief Risk Officer

FNMA maintains links for the following items on its web site. These copied links below are inactive from this browser, but the stated topics covered will be useful to readers intending to go to the FNMA site.

https://www.efanniemae.com/sf/lqi/umdp/uad/index.jsp (Working link)

 UAD Recorded Tutorial

 UAD Interactive Reference Manual

 UAD Live Web Seminars

 Fannie Mae Monthly UMDP Yardstick

To improve the quality and consistency of appraisal data on loans delivered to the GSEs, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA), have developed the Uniform Appraisal Dataset (UAD), which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.

For appraisals with an effective date (date of inspection) on or after September 1, 2011, the appraisal report must be completed in compliance with the UAD for conventional mortgage loans sold to Fannie Mae or Freddie Mac.

The UAD is a component of the Uniform Mortgage Data Program  UMDP, jointly established by Fannie Mae and Freddie Mac under the direction of our regulator, the Federal Housing Finance Agency, to provide common requirements for appraisal and loan delivery data.

UAD Business Resources for Lender Underwriting and Property Valuation Staff

The UAD Field-Specific Standardization Requirements are designed to assist those in any organization who are responsible for creating and reviewing appraisal reports during the property inspection, underwriting, property valuation, or quality control processes to assess the impact of the UAD requirements on those processes.

 UAD Field-Specific Standardization Requirements (.pdf)

 

The above data, as well as most of Fannie Mae’s online information is copyrighted information. Rather than copying more than a minimal amount necessary for us as appraisers to comply with the Government Regulated Enterprises (GSE) new systems), I am providing the links to the documents listed on their pages, below:

The BEST UAD information page available!

https://www.efanniemae.com/sf/lqi/umdp/uad/index.jsp

UAD Overview:

https://www.efanniemae.com/sf/lqi/umdp/pdf/uadoverview.pdf

UAD FAQs 04/11/2019 Updated (pdf format)

https://www.efanniemae.com/sf/lqi/umdp/pdf/uadfaqs.pdf

 

[Appraiser Home] [A  Messaage From Mike] [Mr. Ford's Background] [What is an Appraisal] [Q & A] [Compensation: Reasonable & Customary] [Services Offered] [Commercial Services] [Industrial Services] [Value Definitions] [UAD / URAR] [USPS Publication 28] [FNMA UAD] [FreddieMac UAD] [UAD Definitions] [M.I.S.M.O.] [Coverage Area] [IRS Related] [IRS Forms] [IRS Appraisal Guidelines] [Technology] [Contact] [License Verification] [Research Resources] [FRAUD -FBI -INFO] [Lawsuits 'n Such] [HUD / FHA] [SBA] [SCIG DEIR Pt 1 to 3pt95]