There is a major change coming to the home appraisal process, and I think it is important for homeowners to understand what it could mean for them.

Beginning November 2, 2026, appraisals submitted for conventional mortgages backed by Fannie Mae and Freddie Mac will be required to use a new reporting format called UAD 3.6.

This does not change how a buyer qualifies for a mortgage. It changes how an appraiser inspects, documents and evaluates a property.

I have been in real estate for 25 years, and appraisals have always been an important part of the buying and selling process. What is changing is the level of detail. The new reports will be much more specific and leave less room for vague descriptions.

Comparable sales will be evaluated more closely

Appraisers will provide more detailed information about why certain comparable sales were selected and how they compare to the subject property.

They will look at:

• Location
• Age and architectural style
• Above grade living area
• Bedroom and bathroom count
• Condition and quality
• Lot size
• Renovations and finishes
• Garage size and parking
• Views and surrounding influences
• Pools, outbuildings and other amenities

Even the description of a garage may become more specific. If a garage cannot reasonably fit two vehicles, it may not be considered a true two car garage simply because it has been described that way in the past.

Appraisers will continue to look for the most relevant recent sales, with arm’s length transactions generally providing the best comparisons. If an older or less typical sale is used, the appraiser may need to explain why it is relevant.

Above grade and below grade finished areas will also be separated. A beautifully finished basement can add value, but it is not counted the same way as above grade living space.

“Updated” will no longer tell the entire story

In the past, an appraisal might describe a kitchen or bathroom as simply “updated.” The new report will capture much more information.

The appraiser may document:

• Whether the cabinetry is stock, semi custom or custom
• The type and quality of the countertops
• Flooring materials
• The age and condition of the appliances
• When the space was renovated
• The extent of the renovation
• The quality of the materials and workmanship

There is a difference between installing new countertops and completing a full kitchen renovation. The new format is designed to make those differences clearer.

Renovations will need better documentation

If you are making improvements to your home, start keeping good records now, even if you are not planning to sell anytime soon.

Save:

• Receipts and paid invoices
• Contractor information
• Permits and inspection records
• Before and after photographs
• Product information and warranties
• The dates the work was completed
• A description of everything that was done

The report will include more detailed information about the age, condition and scope of renovations. Keeping good records can help an appraiser understand exactly what was improved instead of relying only on what can be seen during one appointment.

The layout and functionality of the home will matter

The appraisal will capture more structured information about the bedroom and bathroom count, floor plan, flow and functional utility of the home.

It will also look more closely at:

• The quality of completed work
• Energy efficient improvements
• Solar panels and insulation
• Pools
• Accessory dwelling units
• Detached garages
• Outbuildings
• Other significant property improvements

It is not only about how much money was spent. The quality, usefulness and market appeal of the improvement matter too.

Expect more photographs

The new appraisal report is intended to provide a more complete visual picture of the property.

Photographs may document kitchens, bathrooms, living areas, exterior views, yard size, privacy, garages, pools, outbuildings and other important features.

The appraiser may also document things that could negatively affect value, such as a nearby power tower, a less desirable view, an unusual lot or another external influence.

These details all become part of the appraisal story.

Adjustments will require stronger support

When an appraiser adjusts for differences between properties, the adjustment will need to be supported by market evidence.

This could include adjustments for:

• Condition and quality
• Location and views
• Lot size
• Above grade living area
• Garages and parking
• Pools and other amenities
• Renovations and finishes

This does not mean that every improvement will add its full cost to the value of the home. It means the report should provide a clearer explanation of how buyers in that particular market respond to the feature.

The report will be reviewed by people and technology

The new appraisal will not be reviewed only by the lender and underwriter. Its structured information can also be reviewed by Fannie Mae or Freddie Mac and through automated quality control systems.

If information is inconsistent or an adjustment is not properly supported, it may generate a flag and require additional review.

What should homeowners do now?

Even if you are not planning to sell soon, there are a few things you can start doing:

• Keep records of every renovation and major repair
• Use licensed and qualified contractors
• Obtain permits when they are required
• Take before and after photographs
• Keep a running list of improvements and completion dates
• Save warranties, invoices and product information

The biggest takeaway is simple. The details of your home and the quality of the improvements will be documented more carefully, so keeping good records will become even more important.

If you are considering a renovation and want to understand which improvements may matter most when you eventually sell, I am always happy to be a resource.