Adapting to the Data-Driven URAR: UAD 3.6 & UPD Impacts on Key Sections

Hey fellow appraisers, John Anderson here from Valuemate. The winds of change continue to blow through our industry, driven largely by the ongoing UAD 3.6 and the proposed Uniform Property Dataset (UPD) initiatives from Fannie Mae and Freddie Mac. While we've discussed the timeline and the shift away from traditional form numbers, today I want to dive a bit deeper. Let's look at how the structure and data requirements within familiar sections of the Uniform Residential Appraisal Report (URAR) are evolving, and how technology is adapting to this new, data-centric landscape.

The Big Picture: Data Trumps the Form

As established in the GSEs' guidance, the core shift is moving away from a collection of static, numbered forms (like the 1004, 1073, etc.) towards a single, dynamic URAR structure. The key takeaway, detailed in documents like "Functioning without Form Numbers," is that the property characteristics themselves now drive the report's content and layout, not a pre-defined form number. Six key data points – Property Valuation Method, Construction Method, Subject Site Owned in Common, Project Legal Structure, Units Excluding ADUs, and Accessory Dwelling Units – are central to defining the report type needed for a specific assignment. This aims to create a more flexible and consistent reporting standard, especially for atypical properties that didn't always fit neatly into the old boxes.

Deconstructing the URAR: How Sections Are Changing

While the overall container is becoming dynamic, many familiar sections remain, albeit with more structured data requirements. Let's look at some examples based on the UAD Specification documents (like Appendix D-1 and E-1):

• Summary Section: This top section still provides a snapshot, but the underlying data is becoming more standardized. Key identifiers like Property Valuation Method (Traditional, Hybrid, Desktop, etc.) and Construction Method (Site Built, Modular, Manufactured, etc.) are critical, discrete data points (Ref: FIDs 1.010, 1.012 in "Functioning without Form Numbers"). While basic assignment details might still require manual entry (like borrower names), technology could potentially streamline entering property characteristics via dropdowns or even voice input based on initial observations.
• Assignment & Contact Info: Standardization continues here. Fields for Appraiser/AMC details, credentials, and scope are clearly defined. Platforms used for appraisal management might pre-fill much of this based on user accounts, reducing repetitive data entry.
• Site & Improvements (Exterior/Interior): This is where the push for granularity is very apparent. Instead of relying heavily on narrative descriptions buried in addenda, the new URAR structure emphasizes discrete data points for property features, quality/condition ratings (using the C&Q ratings), and deficiencies. For instance, reporting a roof defect requires specific data points for location, description, impact on soundness, recommended action, and estimated cost (Ref: URAR Appendix D-1, Page 4). Tools leveraging LiDAR scanning, like Valuemate, can automate the sketch and area calculations (conforming to ANSI Z765 standards), and AI vision may potentially assist in identifying certain features or materials. However, the appraiser's judgment in assessing condition, identifying specific defects (like distinguishing siding vs. exterior wall issues per the UPD FAQ), and verifying automated suggestions remains paramount.
• Sales Comparison Approach: As discussed previously [here](www.valuemate.ai/blog/uad-36--new-urar-mastering-the-sales-comparison-approach-changes), this section is also moving towards more structured data input for comparable details and adjustments. Integrated data sources and algorithms might increasingly help populate comparable data and even suggest initial adjustment values based on market data, but the final analysis, weighting, and reconciliation are still squarely in the appraiser's court.
• Exhibits & Attachments: Photos are becoming more integrated directly within relevant sections (e.g., photos of defects alongside the defect description, room photos within the interior section). Data collection tools can significantly streamline this by allowing photo capture directly linked to the specific feature or room being documented.

Technology's Role in the Transition

Adapting to this more structured, data-intensive environment is where technology can play a crucial supporting role. Tools designed for modern property data collection, like Valuemate, are being developed with these changes in mind. By leveraging features like LiDAR scanning for automated floor plans and GLA calculations, AI for feature recognition, and structured data entry interfaces (potentially including voice commands for specific sections), such tools aim to:

1. Reduce Manual Effort: Automating tasks like sketching, calculations, and filling standardized fields can free up significant time.
2. Improve Consistency: Structured data input helps ensure required fields are completed according to GSE specifications.
3. Streamline Exhibit Management: Integrating photo capture directly into the workflow simplifies linking images to the correct report sections.

It's important to see these tools as assistants that handle the rote tasks, allowing us, the appraisers, to focus more on the analysis, judgment, and complex aspects of valuation that require our expertise. The potential for automation lies in standardizing the data, not replacing the appraiser.

Looking Ahead

The transition to UAD 3.6 and the potential implementation of the UPD represent a significant evolution in appraisal reporting. While the dynamic URAR replaces the old form numbers, the underlying sections where we input our findings often remain conceptually similar. The key is the shift towards more discrete, standardized data within those sections. Understanding how this data is structured, what's required, and how technology can assist in collection and reporting will be vital for navigating this change successfully. Stay informed, explore the resources provided by the GSEs, and consider how modern tools can fit into your evolving workflow.