Newz: Appraisal Condition Ratings,
Disaster Risks and Appraisals
December 26, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Navigating Value Revisions in Appraisals
- Understanding Appraisal Condition Ratings Under UAD 3.6 and the New URAR By Kevin Hecht
- Off-Grid ‘Bug-Out’ Bunker With a Maze of Secret Rooms That Have Never Been Lived In Lists for Just $715K
- Insurance problems aren’t going away in 2026 By Ryan Lundquist
- My AD: Review of Appraiser’s Guide to the New URAR Class
- Where to get the list of Fannie Mae’s list of verified (approved) appraisal UAD 3.6 software providers
- Disaster Risk and the Housing Market: Telling the Future
- Mortgage applications decreased 5.0 percent from one week earlier
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2024 Updated UAD and URAR – What does It Mean for You?(Opens in a new browser tab)
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Understanding Appraisal Condition Ratings Under UAD 3.6 and the New URAR
By Kevin Hecht
Excerpts: One of the biggest changes from the legacy forms is that condition is no longer captured with a single rating for the entire property. UAD 3.6 breaks condition into several components.
Appraisers now provide an exterior condition rating, an interior condition rating, room-level condition details for each kitchen and bathroom, and finally an overall condition rating in the Reconciliation section. The “overall” rating must reflect the information documented earlier in the report rather than serving as an isolated judgment.
How Updating Is Reported in UAD 3.6
The previous “not updated,” “updated,” and “remodeled” categories are no longer part of UAD reporting. Instead, the URAR captures updating within the required Kitchen and Bathroom Details.
For each kitchen and bathroom, the appraiser reports the update status, the time frame in which updates occurred, the room’s condition status, and brief comments describing the work. This approach provides better clarity and consistency without relying on broad categories.
More topics:
- Understanding Each Property Condition Rating (C1–C6)
- The Role of Defects, Damages, and Deficiencies
- Where Condition Appears in the New URAR
- Condition Ratings and GSE Eligibility
Video 7 minutes 20 seconds by Kevin Hecht – short and covers topics briefly.
To read more, Click Here
My comments: Listen to the short video. The article is well written, explaining the difference between the current forms and new UAD 3.6 QC ratings. This makes the changes easier to understand.
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Off-Grid ‘Bug-Out’ Bunker With a Maze of Secret Rooms That Have Never Been Lived In Lists for Just $715K
Excerpts: 3 bedrooms, 2 baths, 2,061 sq.ft., 31.74 acre lot, built in 1995
An isolated property that was built as a “bug-out” bunker to provide ultimate sanctuary in times of need has hit the market in rural North Carolina—with an asking price of just $714,900.
The 31-year-old emergency dwelling in Vilas, NC, comes complete with every amenity a doomsday prepper or survivalist could hope for, including a maze of secret rooms, solar generators, two wells, wood stoves, fruit trees, and ample land for farming.
What makes this property even more unique is the fact that no one has actually ever lived there in the three decades that the family has owned it.
The family who built the property owned four bug-out properties across the U.S. and outfitted them all with an array of features to ensure that they would be entirely self-sustaining in the event of a disaster.
“The seller inherited this home that her parents built in 1995,” said listing agent Joel Farthing of Boone Real Estate. “As the family was living all over the country, this was one of four bug-out homes they owned with the others being in Arkansas, Alabama, and Arizona.”
Originally designed as a bug-out destination, there are multiple hidden rooms and lots of thought given to security and preparedness, including all of the contents that convey with the home such as solar generators, wood stoves, and a plethora of other supplies. All necessities are on the main level as well as a washer/dryer hookup on the main and in the basement so there is no need to traverse the stairs.
To see the listing with 50 photos and an aerial view, Click Here
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Insurance problems aren’t going away in 2026
By Ryan Lundquist
Excerpts: Insurance has been such a frustrating part of life for so many people, and it’s been a real problem in the housing market. Today, I want to talk about some ways higher insurance is affecting real estate..
HOW INSURANCE IS AFFECTING THE HOUSING MARKET
We’re in the thick of feeling the pain of rising insurance costs in the housing market, and it’s going to take time for this to work itself out. Rising insurance rates are affecting purchasing power among buyers, marketability for sellers, and there is growing uncertainty for owners about what to do if costs keep going up. This affects property owners in fire hazard zones for sure, but we’re also seeing a problem with condo association insurance going up (which causes HOA fees to rise). Insurance has been tough for older and classic homes too, though traditional insurance still seems like it’s still mostly available. But backing up, most types of insurance have been rising, which has been a huge challenge for consumers. Ultimately, higher insurance rates are negatively affecting housing affordability.
NOT A SHOCKER TO SEE MORE FAIR PLAN POLICIES IN CALIFORNIA
When people can’t get traditional insurance, they get what’s called the California FAIR Plan (or “unfair plan” as locals call it). This is basically an association made up of all insurers, and it’s deemed last-resort type of insurance as it tends to be super expensive. By the way, insurance is a growing issue across the country, so it’s not just a California thing.
WHAT TO WATCH IN 2026
Who is going to sell due to rising insurance costs? What are prices doing in outlying areas where insurance has become a significant expense? How is insurance affecting the suburbs with older homes in particular? What are sellers having to offer buyers to entice them – particularly in high fire hazard zones? How are buyers feeling about purchasing when a greater portion of their income is going to various types of insurance?
To read more, Click Here
My comments: The dramatic price increases on the FAIR plan is not good. I live near earthquake faults here in the Bay Area. I have earthquake insurance as my home equity is my primary asset. I have never seen any effect on value of very close proximity to earthquake faults.
In the past few weeks, San Ramon, a city about 15 miles away has been having “earthquake swarms” – relatively short shaking but up to 4.0 level (relatively high). I felt them a few times. I did not know they had nearby earthquake faults.
Only about 10-13% of California households have earthquake insurance, with roughly 1.5 million policies in force as of 2023, despite the state’s high seismic risk, mainly due to high costs, large deductibles, and the perception that a major quake won’t happen to them. Most Californians rely on the California
Earthquake Authority (CEA), a non-profit that offers plans to homeowners and renters, but coverage remains low.
One of the largest earthquakes was The New Madrid in December 16, 1811.While not as well known for earthquakes as California or Alaska, the New Madrid Seismic Zone (NMSZ), located in southeastern Missouri, northeastern Arkansas, western Tennessee, western Kentucky and southern Illinois, is the most active seismic area in the United States, east of the Rocky Mountains.
Of course, what matters the most is how many people and buildings were affected. Relatively few people were living in the New Madras area back in 1811. Many people and buildings would be affected if another earthquake occurred today.
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Review of Appraiser’s Guide to the New URAR Class
In the May 2025 issue
Excerpts: The 112 page PDF document Appendix F-1 “Appraiser’s Guide to the New URAR” handout with 275 slides, provided only to attendees is a “must have” to learn about the New URAR.
Warning: For me, the class material was almost overwhelming even though I had been reading about the new software for awhile. Don’t feel bad if you feel overwhelmed also.
The GSEs provided the slides and other materials. The classes will all have the same GSE materials.
Broad Production starts on January 26-26. Lenders will start using the UAD 3.6 class. Some use of UAD 2.6 (old forms) will be allowed for awhile.
Mandated use is November 2, 2026.
The instructor strongly recommended reading Appendix F-1 with examples
of Report questions and explanation of answers. It is free – link at end of this article.
F-1 is about 350 pages includes data entries that are required on the new reports.
What is best: in-person live, virtual (Zoom style), or classes on your
computer. I strongly recommend in-person as there is a lot of information in the class. Do not take the class on a computer by yourself.
The class I took was virtual from the Appraisal Institute. If you are taking
the class at home, having two monitors is very useful so you could see the both the class slides and the documents used. The class size limit was 49 students.
Most classes are in person, with small class sizes. I would have preferred
this as questions are easier to answer and understand,. In this class, questions were posted in the chat function.
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Where to get the list of Fannie Mae’s list of verified (approved) appraisal UAD 3.6 software providers
Go to: https://singlefamily.fanniemae.com/integrated-vendor-list
Scroll down to Fannie Mae Product Interface.
Click Search and scroll down to UAD 3.6 Appraisal Software Provider
on the list as of 12/24/25:
Aivre www.aivre.com
SFREP www.sfrep.com .
Cotality/almode www.alamode.com
My comments: This means that Fannie verified their report software. They may, or may not, have a mobile app, additional software (their own software or software from another company), GPAR, use of AI, etc.
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Disaster Risk and the Housing Market: Telling the Future
Share it!
Toni Moss, founder and CEO of AmeriCatalyst and EuroCatalyst, believes there’s a maturing crisis unfolding in the homeowners insurance and home mortgage markets.
Excerpts:
Appraisal Buzz: What are the biggest risks natural disasters pose today?
Toni Moss: In addition to individual homeowners being completely wiped out by natural disasters, the biggest risk is the fact that we are headed toward an uninsurable, and therefore, a non-mortgageable future in large areas of the country.
AB: How do you think real estate appraisers should be thinking about this problem? Are we properly accounting for it in our valuations?
Toni: I think the appraisers with added value will be those who are well-educated about climate resilience — homes built on higher ground, or with a special roof, or with all the debris cleared from around them so they won’t go up in a wildfire. A firm called First Street came up with a method to attribute a climate score to every home in the country so that homeowners can make better-informed decisions on their home purchases. And a recent Zillow study found that more than 80 percent of home buyers are looking at property climate scores. I think this is the wave of the future: appraisers who understand how to evaluate a home’s climate resilience and assign appropriate value to that.
AB: What advice would you give appraisers, lenders, and home buyers when assessing properties in areas hit hard by disasters?
Toni: If I were an appraiser, I would educate myself on climate resilience, and then I would market myself as a consultant to help homeowners mitigate some of the risks of climate change to their homes. Even if the properties aren’t for sale, you can do things that would increase their value. Some things to look for: What building materials were used? What is the roof like? What can the house survive, and what’s its climate score? That would be such a value-added skill for an appraiser.
To read more, Click Here
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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, Click Here.
Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample go to www.appraisaltoday.com/order Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.
My comments: Rates are going up and down. We are all waiting for rates to drop lower in 2026.
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Mortgage applications decreased 5.0 percent from one week earlier
WASHINGTON, D.C. (December 24, 2025) — Mortgage applications decreased 5.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 19, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 6 percent compared with the previous week. The Refinance Index decreased 6 percent from the previous week and was 110 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 16 percent higher than the same week one year ago.
“Overall mortgage application volume fell last week, despite the slight decline in mortgage rates,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “MBA expects the trends of a softening job market, sticky inflation, elevated home inventories, and steady mortgage rates will persist into the new year.”
Added Fratantoni, “Purchase application volume last week was 16 percent higher than a year earlier. We are forecasting continued, modest growth in terms of home sales in 2026.”
The refinance share of mortgage activity increased to 59.1 percent of total applications from 59.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 8.1 percent of total applications.
The FHA share of total applications increased to 20.8 percent from 19.5 percent the week prior. The VA share of total applications decreased to 15.3 percent from 16.6 percent the week prior. The USDA share of total applications remained unchanged at 0.4 percent from the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.31 percent from 6.38 percent, with points decreasing to 0.57 from 0.62 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) increased to 6.52 percent from 6.44 percent, with points decreasing to 0.39 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 6.14 percent from 6.12 percent, with points decreasing to 0.75 from 0.82 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.70 percent from 5.72 percent, with points decreasing to 0.64 from 0.74 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 5/1 ARMs increased to 5.79 percent from 5.63 percent, with points increasing to 0.47 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Please Note:
MBA Offices will be closed beginning on Thursday, December 25, 2025 and will reopen on Friday, January 2, 2026. Due to the office closing and holidays, the results for weeks ending December 26, 2025 and January 2, 2026 will both be released on Wednesday, January 7, 2026.
The survey covers U.S. closed-end residential mortgage applications originated through retail and consumer direct channels. The survey has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks, thrifts, and credit unions. Base period and value for all indexes is March 16, 1990=100.
Ann O’Rourke, MAI, SRA, MB
Appraiser and Publisher Appraisal Today
1826 Clement Ave. Suite 203 Alameda, CA 94501
Phone: 510-865-8041
Email: ann@appraisaltoday.com
Online: www.appraisaltoday.com
Posted in:
adjustments,
UAD 3.6 
