Weekly Real Estate News
Summary
Fannie Mae created a temporary exception for approved lenders unable to meet the Nov. 2 UAD 3.6 appraisal mandate, allowing legacy UAD 2.6 submissions through May 19, 2027, with reduced functionality and representation-and-warranty consequences beginning March 1.
Fannie Mae is giving lenders that cannot meet the Nov. 2 deadline for the mortgage industry’s new appraisal-data standard a temporary path to keep submitting legacy UAD 2.6 appraisals into 2027 — but the accommodation comes with increasingly significant collateral-risk consequences beginning March 1.
In Lender Letter LL-2026-08, issued Sept. 30, Fannie Mae said approved sellers that are unable to implement the Uniform Appraisal Dataset 3.6 Policy Supplement by Nov. 2 may request a temporary policy exception. The exception would allow those lenders to continue submitting UAD 2.6 appraisal reports through May 19, 2027.
The Nov. 2 mandate itself has not been withdrawn. Lenders that are ready for UAD 3.6 remain subject to it, and lenders that need additional time must affirmatively request an exception from Fannie Mae.
“The temporary policy exception is intended to provide additional time for affected lenders to implement the changes necessary to comply with the UAD 3.6 Policy Supplement,” Fannie Mae said in the lender letter.
The policy was issued in coordination with the Federal Housing Finance Agency and Freddie Mac, according to Fannie Mae.
The exception gets more costly after March 1
For lenders granted an exception, Fannie Mae will accept both UAD 2.6 and UAD 3.6 appraisal reports through the Uniform Collateral Data Portal from Nov. 2 through Feb. 28, 2027.
The treatment changes March 1.
From March 1 through May 19, Fannie Mae is designating a “Reduced Functionality Period.” UAD 2.6 reports can still be submitted by lenders holding the exception, but those reports will receive a Collateral Underwriter risk score of 999.
There is also a representation-and-warranty consequence. Mortgage loans delivered with a UAD 2.6 appraisal during that period will not be eligible for enforcement relief for breaches of certain representations and warranties tied to the appraisal and the value of the subject property under Fannie Mae’s Selling Guide.
Fannie Mae is therefore encouraging lenders to complete their UAD 3.6 implementation before March 1 even if they receive the temporary exception.
That detail makes the announcement more than a simple six-month extension. The GSE is creating a bridge for lenders that cannot make the November conversion, while preserving a strong operational and risk incentive to move off the legacy dataset well before the exception expires.
May 20 becomes the hard stop for new UAD 2.6 reports
Beginning May 20, 2027, new appraisal reports submitted to Fannie Mae must use UAD 3.6. Legacy UAD 2.6 reports will be accepted only when a lender is resubmitting a report that had already been submitted.
Any new UAD 2.6 submission after that date will generate a fatal edit in UCDP.
Fannie Mae will then end support for UAD 2.6 entirely on June 28. After that date, legacy appraisal reports will no longer be accepted and both policy and technology support for the old format will be retired.
The revised timeline gives affected lenders a series of distinct deadlines rather than one blanket postponement: Nov. 2 remains the formal UAD 3.6 mandate; March 1 brings reduced functionality and loss of specified enforcement relief for loans using legacy reports; May 20 ends new UAD 2.6 submissions; and June 28 retires the format altogether.
A major appraisal-system conversion is already underway
UAD 3.6 is part of the broader appraisal modernization effort undertaken by Fannie Mae and Freddie Mac through the Uniform Mortgage Data Program under FHFA oversight.
The new dataset contains substantially more structured appraisal information than UAD 2.6 and replaces the industry’s collection of static appraisal forms with the dynamic Uniform Residential Appraisal Report. The same report structure can adapt to different property types and valuation methods.
The GSEs opened limited production in September 2025 and broad production on Jan. 26, 2026. Under the previously announced joint implementation schedule, lenders could use either UAD 2.6 or UAD 3.6 during broad production, but appraisal reports submitted on or after Nov. 2 were to use UAD 3.6, apart from revisions to previously submitted legacy reports.
The transition reaches well beyond appraisers. Lenders, appraisal management companies, appraisal software providers, loan-origination technology vendors and other participants that create, transmit, validate or consume appraisal data have had to prepare systems and workflows for the redesigned dataset and URAR.
WRE News previously reported on that technology transition when Aivre received UAD 3.6 verification from Fannie Mae and Freddie Mac, one example of the vendor-readiness work occurring ahead of the mandate.
What lenders need to decide now
Fannie Mae’s letter applies to approved sellers that cannot meet the UAD 3.6 Policy Supplement requirements by Nov. 2. Those lenders must submit a request through Fannie Mae’s UAD 3.6 Policy Exception Request process; the accommodation is not automatic.
Lenders that have already successfully implemented UAD 3.6 do not need to take action because of the letter.
For firms that are not ready, the immediate operational question is no longer simply whether they can complete the conversion by Nov. 2. They now have to weigh the time gained through an exception against the March 1 deterioration in collateral-risk functionality and the loss of specified appraisal-and-value representation-and-warranty relief.
The policy buys time. It does not remove the conversion.
By May 20, every new appraisal report delivered to Fannie Mae must be in UAD 3.6. Five weeks later, the legacy format disappears from Fannie Mae’s submission environment entirely.
