The Uniform Appraisal Dataset 3.6 is set to create massive changes to the appraisal industry when it becomes mandatory on Nov. 2, a transition some appraisers don't want to deal with. With some of an already shrinking appraiser workforce expected to take the new system's implementation as a cue to retire, a market that faces more demand than today's could find itself under strain.
What happens when there are capacity issues?
While not expected, an appraiser shortage could cause major issues for lenders as it had during 2022's capacity struggles
"It was the wild west," said Gino Fronti, vice president of product Lower Mortgage's proprietary AI technology LOAi. "We were extorted."
Some regions around the country with extreme shortages experienced appraiser tourism, in which appraisers from other states would travel to areas with limited options and upcharge lenders. For example, appraisers from California who typically charged $700-$1,000 could make up to $5,000 for an appraisal in the Pacific Northwest at the time, Fronti said.
On a larger scale, lenders throughout the country dealt with extended turn times, ranging from a few days to weeks, and higher appraisal fees, which potentially limited origination volume and damaged relationships.
These ramifications forced lenders to compete with one another for appraisers.
AnnieMac differentiates itself through its internal appraisal team, which consists of three certified appraisers, so it doesn't have to outsource to an appraisal management company that takes a percentage of the appraisal fee. The team can also answer appraisers' questions about the lender's guidelines, which will be particularly helpful when UAD 3.6 is officially mandated.
"Managing it like that allows AnnieMac to treat the appraiser like a partner directly," said Wes Costello, executive vice president of sales operations at AnnieMac, "and we feel that's appreciated."
He also recommends lenders embrace appraisal alternatives, such as waivers. Running Fannie Mae's and Freddie Mac's automated underwriting systems expose lenders to the greatest number of options, potentially allowing them to bypass long turn times and fees, Costello said.
The government sponsored enterprises plan to collect more data under UAD 3.6 as well, which will lead to an increase in appraisal waivers and help lenders lower costs, he said.
"There will always be a place for appraiser involvement," said Kenon Chen, executive vice president of strategy and growth at Clear Capital, "but this idea of having a choice and options from the lender side to use the right product at the right time for the right situation will continue."
How lenders are preparing for UAD 3.6
Lenders should have been planning for UAD 3.6 for the past year, but some have yet to start, Chen said.
Lower has been prepping as much as it can without the necessary software over the past few months and began piloting UAD 3.6 a few weeks ago, giving the lender two months to work out any kinks.
"When this goes live, Lower will be well ahead of the curve, so we don't anticipate that much friction," Fronti said.
Meanwhile, AnnieMac has been preparing for change, but wasn't an early adopter. The lender plans to fully convert its conventional appraisal ordering to UAD 3.6 less than a month before the mandate takes effect. This strategy protects borrowers from higher fees that may come with the new system, Costello said.
UAD 3.6 will allow less appraisers to do more work. But the best way to offset a potential appraiser shortage is to embrace these modernization options before an origination spike, Chen said.
"The ones that will have the greatest advantage are those that don't look at UAD 3.6 just as a compliance change or a mandate only, but view it as an opportunity to rethink their processes, their technology, their vendors, every aspect of their ecosystem," he said. "What I'm seeing is the ones that are jumping in now or have already jumped in have more time to think about getting a competitive advantage through the change."
Why the appraiser pool keeps shrinking
Those appraisers who have been considering retirement for the last few years are using this as an exit ramp, not wanting to learn a new process in hopes market conditions improve in the short term, Fronti said. How many leave the industry is yet to be seen, but its effects could be heightened given the number of appraisers has been declining for the past decade.
"We're hearing appraisers say they're not going to perform 3.6 appraisals," said Costello. "So we'll see that shrink in the pool of appraisers continue."
The number of mortgage appraisers dropped from 55,000 in 2015 to 37,000 in 2025 according to MtgeFi, a data, analytics, and market intelligence platform. The company expects that total to plummet another 10,000 by 2030.
The transition to the new system highlights a major issue appraisers have been facing for years: an aging workforce. Roughly 57% of active appraisers are more than 60 years old, according to Working RE's 2026 State of the Profession Survey, as high barriers of entry and a lack of interest have kept younger workers out of the profession.
Requirements to become an appraiser include: education courses, exams, supervised experience and a college degree. While some prerequisites have been adjusted or lobbied to be removed over the past few years, such as a college degree, the most daunting remains the experience hours. Aspiring appraisers must spend thousands of hours working under a certified supervisory appraiser.
"There's been downward pressure on The Appraisal Foundation to revisit the experience requirements," said John Dingeman, chief appraiser at Class Valuation, an appraisal management company. "If you've got to work with someone for 1,000 to 2,000 to 3,000 hours, depending on what licensure level you're seeking, that's a long time."
Most appraisers typically know someone in the industry prior to entering it. Appraisers struggle to explain exactly what they do, which has led to a lack of interest from people unfamiliar with the profession, especially among high school and college students who look for a quick, digestible sound bite to pique their interest, Dingeman said.
Additionally, top-end talent and prime candidates don't want to be perceived as a trainee, which is the moniker given while they gain experience hours, Dingeman said.
Despite this, most industry experts don't expect there to be significant capacity issues in the near future. The need for appraisers typically follows housing market activity, and with mortgage applications down nearly 60% since 2022, according to the Mortgage Bankers Association, Fronti isn't worried.
"It just hasn't been a problem since 2022," he said. "The problem is not a refi spike. The problem is how long would that spike be sustained. ... If you see a spike for 30-60 days, it's absorbable, and it's not on the forecast to see anything longer than that at any point."
Fronti also said he doesn't see purchase transactions significantly increasing to the point that appraisals are a bottleneck until potentially next spring, hopefully giving the industry enough time to adjust to UAD 3.6 before any major volume hikes.
