Picture this. Your buyer gets a Loan Estimate. The appraisal fee says $550. They budget for it. They relax.
Three weeks later, the appraisal invoice shows up. It says $850.
Nobody lied. Nobody was careless. But nobody planned for the moment we are in right now, either. And that $300 gap is exactly the kind of small surprise that makes a client wonder what else they were not told.
That is the story behind a new Scotsman Guide interview by Ryan Kingsley with Michael Farrell, who just took over as president of the National Association of Mortgage Brokers (NAMB). His summary of the UAD 3.6 rollout was blunt: “It’s basically all roads lead to chaos.”
I want to slow that down a little, because chaos is only chaos when you don’t see it coming.
What Is Actually Happening
UAD 3.6 is the modernized appraisal dataset and report that Fannie Mae and Freddie Mac are moving the whole industry onto. It was set to become mandatory on November 2. In late September, the GSEs announced a limited extension that pushes mandatory adoption to May 2027, but only for lenders that requested and received the exception.
So for the next several months we have two tracks running side by side:
- Track one: lenders that have already switched to UAD 3.6. Some large lenders have been delivering these appraisals to the GSEs since limited acceptance began last November.
- Track two: lenders that still order appraisals under the older UAD 2.6 framework under the extension.
Two tracks means two different price tags and two different timelines for what looks, to your buyer, like the exact same appraisal. (If you missed my earlier post on the gap between appraisers who say they are ready and appraisers who have actually done one, it is the perfect companion to this.)
Why the Price Is Climbing
Here is the part that hits the consumer’s wallet. According to Farrell, the number of field appraisers equipped to complete UAD 3.6 reports is still limited. Limited supply plus growing demand does what it always does. Prices go up.
In the interview, older-format appraisals are running around $550, while modernized UAD 3.6 reports may cost borrowers closer to $850. Part of that is simple supply and demand. Part of it is real work: the new report has new data fields, appraisers have had to train on them, and they are spending more time at the property.
Farrell’s advice on timing is just as practical. He tells originators to plan for an extra three to five days in processing and delivery of UAD 3.6 reports.
Think about what that means on a 30-day contract. Three to five days is not a rounding error. It can be the difference between a calm closing week and a frantic extension request.
The Deeper Principle: Surprises Cost More Than Fees
Here is what I have learned in 26 years of closing loans. Clients can handle almost any number when they hear it early. What they cannot handle is a number that moves after they trusted it.
Farrell made the same point from the broker side. If you pick a lender without knowing which appraisal track it is on, you can end up quoting the wrong fee. That undermines the one thing a loan advisor is supposed to deliver: transparency.
His best-practice recommendation is one I love because it is so simple: over-disclose until you know the exact cost based on the actual appraisal order that was placed. Disclose high, explain why, and let the good news come later if the final number comes in lower.
That is not just compliance. That is trust management. And trust is still the greatest competitive advantage.
What I Would Tell Realtors
You do not control the appraisal. But you control the expectations around it. A few practical moves:
- Ask the lender one question up front. “Are you ordering UAD 3.6 or UAD 2.6 appraisals right now, and what turn times are you seeing?” The answer tells you how to write your dates.
- Pad the appraisal timeline. If your contract deadlines are tight, give yourself a few extra days. A cushion costs nothing. A missed deadline can cost the deal.
- Prepare your buyer for a higher appraisal fee. A quick heads-up that fees are running higher during this transition turns a future surprise into a “she told me so” moment.
- Prepare your sellers, too. A longer appraisal window affects their move date and their next purchase. Nobody likes learning that at the last minute.
What I Would Tell Loan Officers and Brokers
- Know your investor’s track. Farrell’s warning to brokers was clear: be very careful which lender you use for your consumer. Know before you lock, not after.
- Factor the extra days into your lock period. Longer turn times need to be built into rate lock decisions. An extension fee is a much harder conversation than a slightly longer lock.
- Disclose conservatively. Quote the higher appraisal fee until the actual order confirms otherwise.
- Talk to your referral partners before they ask. A two-minute “here’s what’s changing with appraisals” call positions you as the expert, not the excuse.
The Upside Nobody Is Talking About
It is easy to read all this and feel frustrated. But here is the bigger picture. Farrell believes UAD 3.6 will make Fannie and Freddie better. The richer data collected by appraisers should open the door to more hybrid appraisals and more appraisal waivers over time.
In other words, the short-term pain is building toward a faster, more data-driven appraisal process. That is technology doing what it should do: making the process smoother so we can spend more time on people.
Farrell also made a point I agree with. Pointing fingers at software providers, appraisers or lenders does nothing for the consumer, who ends up paying for the delays. The learning curve is too steep for anyone to figure out at the last minute. The professionals who start now win.
Your Action Step This Week
Forms change. Deadlines change. Pricing changes. People don’t. Buyers still want to know their number is real and their closing date is safe.
So here is your challenge. Before you write your next offer, ask your lender which appraisal track they are on and what fee they are disclosing. Then tell your buyer before anyone else has to. Knowledge is power, and in this market it is also peace of mind.
And if you want a straight answer on how UAD 3.6 affects a file you are working on, just call Kate.
Frequently Asked Questions About UAD 3.6 Appraisal Costs
1. What is UAD 3.6?
UAD 3.6 is the updated Uniform Appraisal Dataset used by Fannie Mae and Freddie Mac, paired with a redesigned appraisal report. It collects more detailed, structured property data than the older UAD 2.6 format.
2. When is UAD 3.6 mandatory?
The original mandatory date was November 2, 2026. In late September, the GSEs announced a limited extension to May 2027 for lenders that were granted an exception. Lenders without the exception must move to UAD 3.6 on the original timeline.
3. Why are some lenders still using UAD 2.6 appraisals?
Lenders that received the GSE extension can keep ordering the older format until the extended deadline. That creates a dual track where different lenders may order different appraisal types for similar loans.
4. How much more does a UAD 3.6 appraisal cost?
In the Scotsman Guide interview, NAMB President Michael Farrell said older appraisals are running around $550, while UAD 3.6 reports may cost closer to $850. Actual fees vary by market, appraiser and appraisal management company, so ask your lender what it is disclosing.
5. Why is the new appraisal more expensive?
Fewer appraisers are equipped to complete UAD 3.6 reports right now, so demand is outpacing supply. The new report also requires training on new data fields and more time at the property.
6. Will UAD 3.6 slow down my closing?
It can. Farrell advises planning for an extra three to five days in processing and delivery of UAD 3.6 reports. Build that cushion into contract deadlines and rate lock periods.
7. How should a rate lock account for UAD 3.6?
Talk with your loan officer about choosing a lock period long enough to absorb a slower appraisal. Extending a lock later can cost money, so it is usually better to plan for the extra days at the start.
8. What does “over-disclosing” the appraisal fee mean?
It means quoting the higher expected fee on the Loan Estimate until the actual appraisal order confirms the final cost. If the real fee comes in lower, the borrower gets good news instead of a surprise.
9. How can Realtors help buyers through the transition?
Ask the lender early which appraisal track it is using, allow a few extra days for the appraisal in your contract timelines, and give buyers and sellers a heads-up that fees and turn times may run higher for now.
10. Is there any long-term benefit to UAD 3.6?
Yes. Farrell believes the richer data from UAD 3.6 will allow more opportunities for hybrid appraisals and appraisal waivers over time, which could make the process faster and simpler once the industry is through the learning curve.
Source: Ryan Kingsley, “UAD 3.6 appraisal overhaul puts mortgage borrowers on the hook for higher costs,” Scotsman Guide, October 13, 2026. Quotes and figures attributed to NAMB President Michael Farrell are from that interview.
This article is for educational purposes only and is not a commitment to lend. Fees, turn times and program availability vary and are subject to change. Kate Deiboldt, Senior Mortgage Advisor | VanDyk Mortgage Corporation | NMLS #18487 | Company NMLS #3035 | (931) 980-9764 | Kate@VanDykMortgage.com | Licensed in TN, KY, AL, FL, GA, TX and IL | Equal Housing Lender | www.nmlsconsumeraccess.org
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