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Comprendiendo el Nuevo Enfoque del UAD 3.6 sobre Defectos, Daños y Deficiencias

Lo que todo tasador debe saber

 

Have you reviewed how UAD 3.6 completely restructures the way we document property defects?

The upcoming Uniform Appraisal Dataset 3.6 introduces a substantial change to how appraisers will record and report property issues. While no one has fully implemented this system yet (form-filling software vendors are still incorporating these changes), understanding what’s coming gives you valuable time to adapt your workflow methodically.

Let me walk you through exactly what’s changing, why it matters, and how to prepare your practice…

 

The New Structure: A Section-by-Section Breakdown

UAD 3.6 introduces a comprehensive, structured framework for documenting defects, damages, and deficiencies. Unlike the current approach, which often varies by appraiser preference, the new system standardizes documentation across six distinct property sections:

• Site – Issues related to the land, access, drainage, etc.
• Dwelling Exterior – Separate documentation for each dwelling on the property
• Outbuilding – Individual documentation for each detached structure
• Unit Interior – Separate entries for each unit or ADU
• Vehicle Storage – Garages, carports, and other parking structures
• Subject Property Amenities – Swimming pools, tennis courts, etc.

When no defects exist in a section, “None” will display automatically. This helps establish a clear record that you’ve considered each area, even when no issues were found.

The Critical Data Fields You’ll Need to Complete

For each identified defect, damage, or deficiency, UAD 3.6 requires specific data points:

1. Feature – The specific element affected (Exterior Walls, Flooring, Foundation, Mechanical System, Roof, etc.)
2. Location – Where the issue exists (Full Bathroom, Half Bathroom, Kitchen, or Other with description)
3. Description – Detailed explanation of the observed problem
4. Affects Soundness or Structural Integrity – Yes/No designation that feeds directly into underwriting decisions
5. Recommended Action – One of four specific choices: • Completion • Inspection • Repair (includes replacement) • None (does not require attention)

The system maintains consistency by requiring that if you select Completion, Inspection, or Repair for any item, the report must be made “subject to” resolution of that item – the Market Value Condition cannot be “As Is.”

 

The Cost to Repair: Three Reporting Options

UAD 3.6 offers flexibility in how repair costs are documented:

1. None – No cost information provided (perfectly acceptable under Fannie Mae guidelines)
2. Total Cost – A single lump sum for all repairs combined
3. Itemized – Individual cost estimates for each defect requiring repair, with an automatic sum total

It’s worth noting that Fannie Mae’s Selling Guide (B4-1.3-06) explicitly states that appraisers must “identify and describe” needed repairs but are “not required to put a dollar cost on them.” This gives you professional discretion in deciding how to approach the cost issue – a point often overlooked in discussions about the new format.

How the Reconciliation Section Will Change

One of the most significant changes is how UAD 3.6 automatically consolidates all identified defects, damages, and deficiencies into the Reconciliation section of your report.

This new table will display:

• Each item you’ve identified
• Its location and description
• Whether it affects structural integrity
• Your recommended action
• Cost estimates (if provided)

The table provides a comprehensive overview that eliminates the need for underwriters to hunt through various sections of your report to understand property condition issues. While this creates more structure, it also increases visibility of your observations and recommendations.

 

Comparing Current Practice to the New Framework

Let’s explore how this differs from typical current practice:

Current Approach (Varies by Appraiser):

• Defects often noted in different sections with inconsistent formatting
• May be scattered across the improvements section, condition rating notes, and addenda
• No standardized method for indicating structural significance
• Recommended actions often implied rather than explicitly stated
• Cost estimates handled differently by each appraiser

UAD 3.6 Approach:

• Every defect categorized by property section
• Each item explicitly labeled for structural significance
• Clear, required recommendation for every defect
• All issues consolidated in Reconciliation section
• Consistent formatting regardless of who completes the appraisal

This standardization will likely improve communication between appraisers, lenders, and clients – though it does require adapting your documentation habits.

 

What This Means for Your Inspection Process

The structured nature of UAD 3.6’s defects reporting will impact how you conduct inspections:

1. Inspection Tools – Clipboard notes and basic photos may no longer suffice. Mobile technology that allows structured data entry aligned with UAD 3.6 categories will become increasingly valuable.
2. Documentation Flow – Rather than noting issues as you encounter them, you’ll need to mentally categorize each by the appropriate section while on site.
3. Photography – Photos documenting defects will likely need more precise labeling to align with the structured categories.
4. Time Management – Initial inspections may take longer as you adapt to the categorical approach, though efficiency should improve with practice.
5. Reference Materials – Having section-specific checklists will help ensure you’re considering all required elements during the inspection.

While these changes require adjustment, they provide an opportunity to develop a more systematic approach to property inspection that may ultimately reduce revision requests and clarification questions.

 

Fannie Mae’s Actual Requirements: Separating Fact from Rumor

There’s been considerable discussion about what Fannie Mae “requires” regarding defects documentation. Let’s clarify some key points from their official guidance:

1. Describe, Don’t Price (By Default) – Fannie Mae’s Selling Guide states appraisers must “identify and describe” needed repairs but are “not required to put a dollar cost on them.”
2. “As-Is” vs. “Subject To” Usage – Minor deferred maintenance items (normal wear-and-tear) can be appraised “as-is” without affecting loan delivery. Only issues affecting safety, soundness, or structural integrity require a “subject to” approach.
3. Condition Ratings Still Matter – The C1-C6 rating system remains in place alongside the new defects documentation structure.
4. Lender Escrow Handling – When a lender sets an escrow for repairs, appraisers are not automatically re-engaged unless specifically requested.

These clarifications help establish reasonable boundaries around the new requirements and may relieve some concerns about implementation complexity.

 

Practical Preparation: Your Six-Month Action Plan

With UAD 3.6 on the horizon, here’s a methodical approach to preparing your practice:

Months May-June: Education and Understanding

• Download and study the complete UAD 3.6 documentation from Fannie Mae’s website
• Register for the UAD 3.6 7-Hour Class to ensure comprehensive understanding
• Set up your RESNET Appraiser Portal account for the green energy reporting component

Months July-August: Process Development

• Create section-specific defects checklists to use during inspections
• Research mobile technology options that support structured data entry
• Begin practicing categorical documentation on current assignments (for your records only)

Months September-October: Testing and Refinement [limited adoption of 3.6 starts]

• Test your new process on several properties to identify efficiency improvements
• Refine your inspection workflow based on these test cases
• Develop templates for common defects in each category to streamline reporting

This gradual approach allows for comfortable adaptation rather than last-minute scrambling when implementation becomes mandatory.

 

The Technology Question: Mobile Solutions Worth Exploring

The structured data requirements of UAD 3.6 strongly suggest a move toward digital field notes and mobile inspection tools. While specific software recommendations would quickly become outdated, look for solutions that offer:

1. Categorized data entry aligned with UAD 3.6 sections
2. Photo integration with automatic labeling capabilities
3. Cloud synchronization to transfer field data to your report system
4. Customizable templates for common defects by category
5. Export options compatible with your form-filling software

The investment in appropriate technology now may save considerable time and frustration during the transition period.

 

Balancing Perspective: Potential Benefits and Challenges

Any significant change brings both opportunities and obstacles. Here’s a balanced view of what UAD 3.6’s defects documentation approach means for appraisers:

 

Potential Benefits:

• More consistent reporting across the industry
• Clearer communication with clients and underwriters
• Reduced follow-up questions about property condition
• More systematic approach to property inspection
• Better documentation for liability protection

Potential Challenges:

• Initial learning curve and workflow disruption
• Possible inspection time increases during adaptation
• Technology adoption requirements for optimal efficiency
• More structured approach may feel constraining to some
• Temporary productivity decrease during transition

Understanding both sides helps set realistic expectations as you prepare for implementation. Moving from the clipboard to a tablet 🙂

 

The Strategic View: Industry Direction and Professional Development

The UAD 3.6 changes reflect the industry’s ongoing movement toward standardization, structured data, and increased transparency. Rather than viewing these changes in isolation, consider them part of a broader professional evolution.

 

Appraisers who adapt successfully to structured data approaches position themselves well for future industry developments. The skills developed in implementing UAD 3.6’s defects documentation will likely prove valuable as additional standardization initiatives emerge.

Professional development in this area represents an investment in your long-term viability in an increasingly data-driven field.

 

Next Steps: Immediate Actions to Take Today

While full implementation may be months away, there are concrete steps you can take immediately:

1. Download the UAD 3.6 documentation directly from Fannie Mae’s website to familiarize yourself with Section 26 covering the Apparent Defects framework.
2. Register for the UAD 3.6 7-Hour Class to ensure you have expert guidance on the changes.
3. Set up your RESNET Appraiser Portal account in preparation for the green energy reporting component.
4. Begin exploring mobile inspection technology options that will support structured data entry.
5. Start developing section-specific defects checklists to use during the transition period.

These practical steps allow you to approach the changes methodically rather than reactively, positioning your practice for a smoother transition when implementation becomes mandatory.

The appraisers who thrive during periods of change are those who prepare thoroughly and adapt deliberately. UAD 3.6’s defects documentation represents both a challenge and an opportunity to demonstrate your commitment to professional excellence.

Hansel Dobbs, MNAA, CDEI
Real Estate Appraiser | General Manager of Aloft