The secondary market agencies have put out a clarification to the UAD 3.6 adoption timeline, which ends any confusion about when the standard goes into effect.
Mandatory use
Previously, Fannie Mae and Freddie Mac used the term loan submission. Typically, the appraisal is put into the UDCP before the loan is submitted to a GSE. So with this change, it makes it clear even if the loan is delivered at a later date, a valuation being put into the UDCP for the first time on Nov. 2 or later has to use the UAD 3.6 format.
"It simply means that they have all the way up until Nov. 2, as opposed to actually having to be really ready ahead of time," added Green, who is also
The change in language removed any reference in timing to loan delivery. It is not an adoption timeline slowdown or deferment, she continued.
But before these changes, people might not have connected the dots regarding timing when they started getting into planning and testing and trying to roll this out. Now it is clear the appraisal submission is the date to use, and lenders do not have to use UAD 3.6 for UDCP entries made in September, Green reiterated.
"I think that clarification, in and of itself, should give lenders a better understanding of what they need to work towards, but they should still push forward," she said.
Furthermore, the latest documents, which also includes an updated FAQ, notes any appraisal in the UDCP which uses UAD 2.6 and gets modified will remain in the older format.
The updated timeline notes the UAD 2.6 pipeline closes on May 3, 2027.
While Fannie Mae and Freddie Mac are driving the adoption process,
Since Jan. 26, the process is in the "broad production" phase, where submissions to the UDCP can be made using either UAD 2.6 or 3.6; this ends on Nov. 1.
As part of the updated timeline, the GSEs removed the out of date calendar items, Green said.
Meanwhile the adoption process is moving along, she said.
"We have appraisers still ramping up on software," Green said. "We still have lenders who are just beginning to embark on incorporating 3.6 into their processes."
In Green's view it will be around June, July and August where people really start the volume of appraisals using UAD 3.6 increase,
But since with the lead time until the mandatory date, it means if a market does not have an appraiser ready for UAD 3.6, "we could still use 2.6 and still not worry about the impact to the loan delivery itself," Green said.
Still when it comes to the adoption process, people in the industry should be doing everything they can to help each other move forward to the new standard.
"It's okay to start slow," Green said. "If you started in June with a couple of orders, it's still preferable to completely waiting until you get closer to the deadline; you get a chance to kick the tires."
