Appraisals Change on November 2. Here's What Buyers Should Know.

On November 2, 2026, the appraisal forms the mortgage industry has used for decades go away. Fannie Mae and Freddie Mac are requiring a new standard called UAD 3.6 on every conventional appraisal delivered after that date, and the familiar form numbers, the 1004, the 1073 for condos, the 1025 for two-to-four units, the 2055, are being retired entirely.

For most buyers this will be invisible. Your appraisal gets ordered, it comes back, the deal moves. But a few of the changes are worth understanding, particularly if you are buying an older home, a Cape Cod, a property with a finished basement or a converted attic, or anything with outbuildings.

Here is the plain-English version.

One form instead of many

Instead of choosing a form number and making the property fit it, appraisers now use a single dynamic report called the URAR, the Uniform Residential Appraisal Report. It expands or contracts based on what is actually being appraised. Condo, single family, two-to-four unit, manufactured home, they all run through the same report, with sections turning on and off as the property requires.

Practically, this means fewer situations where an unusual property gets shoehorned onto a form that was not built for it.

"Gross living area" goes away

This is the change most likely to come up in a real transaction.

GLA is retired as a term. The new report splits a home into four separate categories:

• Finished Area Above Grade
• Finished Area Below Grade
• Unfinished Area Above Grade
• Unfinished Area Below Grade

If you have a finished walkout basement, this is good news. It is no longer either crammed into a single living-area number or left out entirely. It gets reported on its own line, and the reader of the appraisal can see exactly what it is.

The ceiling height rule is not new, but it becomes hard to miss

You may hear that the new rules mean your converted attic no longer counts as square footage. That is not quite right, and the distinction matters.

The measurement standard behind this, ANSI Z765, has been required by Fannie Mae since 2022. It says finished area generally requires a ceiling height of at least seven feet, with specific allowances for beams, ducts, and sloped ceilings, and that area under five feet cannot be counted at all. That rule has been in effect for four years.

What changes on November 2 is enforcement and visibility. Instead of one square footage figure, the appraiser reports a level-by-level breakdown along with a labeled digital sketch, and automated systems cross-check the two. A number that does not reconcile gets flagged. The classification also has to be made at the property during the inspection rather than sorted out afterward.

So the rule is the same. It is just about to become much harder to be loose about.

There is a piece of this that gets left out of most coverage: the new report includes a category for nonstandard finished area. A finished attic room with six-foot-nine ceilings does not vanish from the appraisal. It moves to its own line with a narrative explanation. Being reported separately is not the same as being worth nothing, and the appraiser still considers what that space contributes to value.

Where this does create friction is when a listing counts space one way and the appraisal counts it another. That gap already exists. It is going to be more visible now, and better documented.

More detail, captured as data

The other theme is that things appraisers used to describe in a comment box now have their own fields:

• Room-level detail, including dimensions, condition, and materials
• Energy features like HVAC configuration, solar equipment, and insulation
• Accessory dwelling units, with size, condition, and room detail of their own
• Site characteristics such as fencing, outbuildings, and access road type
• Broadband availability and disaster mitigation features
• Tighter, more specific definitions for the condition and quality ratings

None of this changes how a property is valued. It changes how thoroughly the work gets documented, and it produces a report that lenders and automated systems can actually read.

Why appraisals keep getting more expensive

Buyers ask this constantly, usually some version of why an appraisal costs what it does compared to ten or fifteen years ago. There are a few reasons, and this change is the latest one.

After 2008, regulation separated loan officers from direct contact with appraisers, and appraisal management companies became the intermediary on most conventional loans. Those companies take a portion of what you pay, so a meaningful share of the fee never reaches the person doing the work. At the same time the appraiser workforce has shrunk and aged, with a thin trainee pipeline, which means fewer appraisers handling the same volume. And each regulatory cycle has added scope: more documentation, more verification, and now room-level data capture and structured fields that take real time to complete correctly. Add software and mobile data capture that appraisers have to buy and learn, and the fee is buying more work than it used to, only some of which is appraisal work.

I do not know yet what this does to fees specifically, and anyone telling you a number right now is guessing. More work per assignment usually finds its way into pricing eventually.

The better answer: try to skip the appraisal entirely

Here is the part that actually matters for your transaction.

Not every loan needs an appraisal. Fannie Mae and Freddie Mac both offer appraisal waivers on loans that qualify, and when you get one, you skip the cost, the scheduling, and the risk of a low appraisal derailing your contract.

Whether a loan qualifies is determined by the automated underwriting system, and this is where a broker has an advantage over a single lender. There is more than one automated underwriting system, and they do not always return the same answer on the same file. A loan that gets no waiver through one system may get one through another. Small differences in how the file is structured can change the outcome as well.

So on every file where a waiver looks plausible, I run it through more than one system before accepting that an appraisal is required. It is a few extra minutes of work and it sometimes saves a client several hundred dollars and a week of calendar time.

A single retail lender generally runs one system and takes the answer it gets. That is the practical difference.

Waivers are not available on everything. They are more common on rate-and-term refinances and on purchases with strong equity positions and clean, well-documented files, and less common on unusual properties, high loan-to-value purchases, or anything with limited data available. But it is always worth checking, and it is worth checking more than once.

What to do about any of this

If you are buying between now and November, nothing changes for you. If you are buying after, the appraisal will look different and contain more detail, and the process itself is largely the same.

If your home has a converted attic, a finished basement, or anything where the square footage is likely to be counted differently by different people, it is worth knowing that going in rather than discovering it during underwriting.

And if you want to know whether your loan might qualify for an appraisal waiver, that is a question worth asking before you order one. Send me your scenario and I will run it.

For more on how appraisal standards and loan guidelines interact, see our guides on FHA streamline refinancing (which can bypass appraisal entirely) and mortgage pre-approval. For the official Uniform Appraisal Dataset announcements, visit Fannie Mae. Freddie Mac publishes its own UAD and Forms Redesign FAQ.