UAD 3.6 and the new appraisal report: what changes for San Diego sellers and buyers

What is UAD 3.6, and what changes in a San Diego appraisal?

UAD 3.6 is the data standard behind the redesigned Uniform Residential Appraisal Report, which replaces the appraisal forms Fannie Mae and Freddie Mac have used — Fannie Mae’s Form 1004 for a house, Form 1073 for a condominium and nine other forms — with one dynamic report for every residential property type, San Diego County houses, condos and manufactured homes included.

The report is built from data rather than from a fixed page. In Freddie Mac’s words, “the data that describes the subject property drives the appraisal report, not a form type or number,” so sections appear when the property calls for them: an appraisal of a house with an ADU, a view and a finished lower level carries sections that a report on a flat-lot tract home does not. Fannie Mae’s Selling Guide announcement of June 4, 2025 lists what moves with it — square-footage reporting changes, and the quality and condition rating definitions are rewritten.

Fannie Mae is not starting to read appraisal data now. Lenders already have to submit appraisals for conventional loans sold to it electronically, through the Uniform Collateral Data Portal, and its Collateral Underwriter tool already scores them. What changes is how much of the house is recorded as data rather than as narrative.

What stays the same is the job. An appraiser still describes the home, chooses comparable sales and reaches an opinion of value, and the lender still sizes the loan against that value. The practical change for a seller is more detail, recorded in a fixed structure. Where the listing and the house agree, that is simply more description. Where they disagree — an unpermitted conversion, a lower level the listing counts as main-floor space — the report now has a specific place to say so.

Does the old appraisal format really end on November 2, 2026?

November 2, 2026 is the date Fannie Mae and Freddie Mac start requiring UAD 3.6 for new appraisal reports submitted to their portal, but the old format does not end that day for every San Diego County loan: a lender granted a temporary policy exception can keep submitting UAD 2.6 reports through May 19, 2027.

Fannie Mae announced the exception on September 30, 2026, in Lender Letter LL-2026-08, in coordination with Freddie Mac and FHFA, and a lender has to request it from each company. It runs in stages. Through February 28, 2027, a lender holding the exception can submit either format. From March 1 to May 19, 2027, UAD 2.6 reports are still accepted but receive a Collateral Underwriter risk score of 999, and loans delivered with them are not eligible for Fannie Mae’s enforcement relief on certain appraisal and value warranties, which is why Fannie Mae encourages lenders to switch before March 1. From May 20, 2027 new submissions must be UAD 3.6, and support for UAD 2.6 ends on June 28, 2027.

The date that matters is when the lender first submits the appraisal to the Uniform Collateral Data Portal — Freddie Mac ties the mandate to each report’s initial submission date — not when the home was listed, went into contract or closes. So a San Diego seller listing this fall may see either format, depending on which lender the buyer uses.

Which San Diego home loans does the UAD 3.6 change cover?

The UAD 3.6 requirement covers appraisals for conventional loans that Fannie Mae and Freddie Mac buy, which in San Diego County in 2026 means a one-unit loan of up to $1,104,000, FHFA’s conforming limit for the county; FHA, VA and jumbo loans run on their own rules.

The limit applies to the loan, not the price: a $1.4 million purchase with 25 percent down is a $1,050,000 loan and still conforming. Above the limit, a jumbo loan cannot be sold to Fannie Mae or Freddie Mac, so their mandate does not reach it and the appraisal format is the lender’s or its investor’s call. FHA is moving on its own schedule: FHA INFO 2026-23, issued October 1, 2026, opened an optional period in which lenders may deliver UAD 3.6 appraisals for FHA loans or keep using the legacy UAD 2.6 format, and FHA has not set a date when the new format becomes mandatory. Freddie Mac says the government agencies’ requirements were built into UAD 3.6; when each agency requires it is that agency’s decision.

The number is lower across the county line. Riverside County’s 2026 one-unit limit is the national baseline of $832,750, so a $900,000 loan that is conforming in San Diego County is a jumbo loan in Temecula, Murrieta or Menifee — one of the differences covered in crossing the county line. Either way, the question to put to the buyer’s lender is the same: which report will it order?

Why can an appraisal's square footage differ from a San Diego listing's?

Appraisers on Fannie Mae loans in San Diego County measure houses to the ANSI Z765-2021 standard, and Fannie Mae’s own guidance says square footage in MLS systems and assessor records “may not have been derived using the ANSI standard” — so the appraisal’s finished-area figure can differ from the listing’s without either number being a mistake.

The standard carries rules a listing has no obligation to follow. Finished area needs a ceiling of at least seven feet; in a room with a sloped ceiling at least half the floor must reach seven feet and none of it can fall below five. A finished room reached only through an unfinished space is reported separately as nonstandard finished area, and an opening to the floor below, such as a two-story entry, is not counted. For loan applications dated from September 8, 2025, the Selling Guide uses the standard’s vocabulary — “gross living area” and “basement” became above-grade and below-grade finished area — and an appraiser can neither opt out of the standard nor follow local custom instead.

Two qualifications are worth knowing. A condominium in an apartment-style building, such as a downtown or Little Italy tower, is measured by its interior perimeter instead, because the standard cannot be used for apartment or multifamily buildings; a townhouse is measured to it. And Fannie Mae is explicit that the standard is a description, not a discount: “Done correctly, adherence to the standard does not change the value of the property.”

How is a hillside home's lower level reported in a San Diego appraisal?

On a San Diego hillside or canyon lot, a lower level with any part of its walls below ground is reported as below-grade area under the ANSI rule Fannie Mae applies — even when that level opens onto a yard or a view on its downhill side.

That is the terrain several of our guides describe — the canyon rims of Mission Hills, the hillside streets of Del Cerro, the Mount Soledad slopes of La Jolla — and it is where an appraisal and a listing can describe the same house differently. A listing may fold a finished walk-out level into one square-footage figure. The new report splits it into above-grade and below-grade finished area, lists the rooms level by level, and, under the photo requirements Fannie Mae and Freddie Mac published on June 23, 2026, shows every finished and unfinished below-grade room.

The space still counts. Fannie Mae requires adjustments that reflect how the market actually reacts to a kind of space, which the appraiser establishes from comparable sales that have, or lack, something similar. A seller who knows the split in advance can describe the home in the terms the appraisal will use, which takes one surprise out of escrow.

How does the new appraisal report handle an ADU in San Diego?

An accessory dwelling unit on a San Diego County property gets its own detail in the redesigned report — size, condition, rooms and location, in Freddie Mac’s summary — and Fannie Mae requires it to be measured to the ANSI standard and kept out of the main house’s above-grade finished area unless it sits inside the house, above grade, with interior access.

The photo requirements add interior photos of an ADU, and a standalone unit is photographed inside and out like any outbuilding. Permits matter more than photographs. Fannie Mae’s Selling Guide requires an appraiser who finds an addition without the required permit to comment on the quality and appearance of the work and its effect on market value. A permitted unit with a final inspection is the version an appraiser and a lender can count, the same point what adds value to a San Diego home makes about ADUs in general.

The unincorporated county adds an option a city offers only if it has opted in: since April 4, 2026 an ADU there can be converted to a condominium and sold on its own, which is covered in the County’s AB 1033 ordinance.

What does the appraiser have to photograph in a San Diego home now?

Under the photo requirements Fannie Mae and Freddie Mac published on June 23, 2026, a UAD 3.6 appraisal of a San Diego County home must show every kitchen, every bathroom and the main living areas, bedrooms included — and, where they exist, below-grade rooms, recent remodeling or renovation, the inside of an ADU, and every view that affects value or marketability.

The view requirement is the San Diego one. An ocean, bay or canyon view that a listing prices in has to be photographed in the appraisal whenever it affects value or marketability. Significant defects, damage and deficiencies are recorded as their own data in the site, exterior, interior and outbuilding sections rather than as a remark, and the quality and condition rating definitions were rewritten as part of the same change.

None of that is a reason for alarm about a well-kept house. It is a reason to fix the small, visible things before the appraiser arrives, for the same reasons they matter to a buyer, and the order to do them in is laid out in what to fix before selling.

What can a San Diego seller give the appraiser?

A San Diego County seller can give the appraiser facts — a dated list of improvements with permit numbers, an ADU’s permit and final inspection, and recent comparable sales worth considering — because federal rules expressly allow asking an appraiser to consider additional, appropriate property information, including information about comparable properties.

The rule is Regulation Z at 12 CFR 1026.42, which covers loans secured by a consumer’s principal dwelling. Its list of permitted actions includes asking the appraiser to consider more property information and comparable sales, asking for more detail on how the value was reached, and asking for errors to be corrected. What it forbids is trying to make the value rest on anything other than the appraiser’s independent judgment, whether through coercion, extortion, inducement, bribery or intimidation, or through instruction or collusion. So the useful packet is facts and sales, never a target number.

Assembling it is mostly the same work a buyer’s agent and lender will ask for anyway: permits finaled rather than merely pulled, the date and scope of each remodel, the HOA documents for a condo, and, for a home with panels, the paperwork that decides whether solar is an asset or an obligation, covered in selling a house with solar in San Diego.

What happens if a San Diego appraisal comes in below the contract price?

A San Diego County appraisal below the contract price does not change the price on its own, but on a Fannie Mae loan it caps the value the loan is sized against — the Selling Guide uses the lower of the sales price and the appraised value — so the buyer and seller have to decide what to do about the gap.

The choices are the ones the contract allows: renegotiate the price, have the buyer cover the gap in cash, or cancel under the appraisal contingency if the buyer still has one, with the contingency periods laid out in how long buying a home takes. The buyer has one more route. Fannie Mae requires lenders to have a process for a borrower-initiated reconsideration of value: one request per appraisal, with up to five alternative comparable sales, disclosed when the appraisal is delivered and unavailable once the loan closes.

A seller cannot file a reconsideration, but the comparable sales a listing agent assembled before the appraisal are exactly what a buyer would submit with one. That is the durable lesson in the redesign, more than any change of form: the work that supports a price is done before the appraiser arrives.