New Appraisal Mandate Could Raise Closing Costs $300
Home buyers may see higher fees and longer processing times as lenders transition to the new UAD 3.6 reporting format.
Updated on Oct. 21, 2026 in Residential
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Fannie Mae and Freddie Mac have introduced a temporary exception to the November 2 UAD 3.6 appraisal mandate, allowing lenders to use legacy 2.6 reports until May 19, 2027. Borrowers may experience varying closing costs and timelines depending on their lender's ability to transition to the new reporting standard.
Why it matters
The transition to UAD 3.6 is straining capacity as nearly one-quarter of appraisers are expected to retire rather than adopt the new format. This shift creates potential for higher closing costs and longer processing times for home buyers and refinancers as the industry navigates software updates and a shrinking pool of practitioners.
Moving to the UAD 3.6 format is projected to increase appraisal costs by $200 to $300, with samples showing a rise from $555 to $850. Orders may also face processing delays of 3 to 5 days as the industry works to adapt to the new mandate.
The players
Fannie Mae
A government-sponsored enterprise that provides liquidity to the mortgage market by purchasing home loans from lenders.
Freddie Mac
A government-sponsored enterprise that supports the housing market by buying mortgages to stabilize interest rates.
The Appraisal Foundation
An organization that sets national standards for appraisal practice and developer of reporting formats.
Appraisal Institute
A professional association for real estate appraisers that provides education and advocates for industry standards.
The details
Lenders must request the legacy UAD 2.6 exception from Fannie Mae and Freddie Mac to continue using the older format. While this provides a temporary reprieve, loans using 2.6 reports will lose collateral representation and warranty relief starting March 1, which may influence lender risk pricing. Brokers are required to disclose to clients if the adoption of the newer, more expensive 3.6 format will affect their total closing costs.
Timeline
November 2: UAD 3.6 appraisal mandate takes effect.
March 1: Collateral warranty relief ends for 2.6 reports.
May 19, 2027: Deadline for legacy 2.6 appraisal submissions.
Money Landscape
This policy exception reflects the logistical challenges of implementing the UAD 3.6 appraisal mandate across a workforce with an average age over 62. It represents a significant adjustment to the mortgage industry's modernization efforts as firms struggle with appraiser capacity.
Home buyers and refinancers should ask their lenders if they are utilizing the legacy 2.6 appraisal format to avoid the projected $300 cost increase. Review your closing disclosure closely to identify if appraisal fees have changed due to the new reporting requirements.
The takeaway
The move to UAD 3.6 is creating a temporary price gap that may impact your closing costs depending on your lender's software readiness. When planning your mortgage application, ask your loan officer specifically about their appraisal workflow and whether they anticipate any delays.
What happens next
Lenders must apply for the UAD 2.6 exception before the November 2 mandate to maintain current submission workflows.
Further reading
For more on how industry rules influence your home purchase costs, visit Residential.
Source note: This article includes information reported by Mortgage Professional America Magazine.
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