Newz: AI and Appraisers, FHA Handbook Updated,
History of Residential Appraisal Regulations
August 22, 2025
What’s in This Newsletter (In Order, Scroll Down)
- LIA AD: Should I consider this an actual claim?
- 7.5 Things Appraisers Can Do That Artificial Intelligence Cannot, By Mark Buhler
- Home Made Entirely Out of Shipping Containers Hits the Market for $5.2 Million in New Hampshire
- FHA Handbook Updated
- The New Appraisal Report: How One Company Is Rethinking Appraisal Software
- A Primer on Regulations and the Practice of Residential Property Appraisal
- Mortgage applications decreased 1.4 percent from one week earlier
AI and Appraisals – the Future
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7.5 Things Appraisers Can Do That Artificial Intelligence Cannot
By Mark Buhler
Excerpts: Artificial intelligence is making waves in nearly every industry — and real estate appraisal is no exception. Computer generated algorithms and valuations promise quick results and lower costs, and some headlines are already asking the question: “Will appraisers be replaced by AI?”
The short answer? Not even close.
What appraisers can do
1. Judge Condition and Quality
An AVM might see a listing that says “4 bedrooms, 3 baths, 2,400 square feet.” What it won’t know is that one of those bedrooms hasn’t been updated since the Nixon administration and still sports avocado-green shag carpet. Appraisers evaluate condition, quality of construction, level of maintenance, and updates — all of which have a direct impact on value. Without physically inspecting a property, AI misses these nuances entirely.
2. Interpret Unique Features
3. Spot Red Flags the Data Misses
4. Smell the House
5. Explain and Defend Adjustments
6. Testify in Court
7. Apply Professional Judgment
7.5 Half Point: Remember to Knock
How to Start Leveraging AI in Your Practice – 7 ways
AI won’t replace appraisers — but appraisers who embrace it will leave others behind. Here are a few easy ways to get started:
1. Use AI‑Driven Comp Tools: Platforms now exist that can quickly identify potential comparables based on similarity scoring. Use them to save time — but always vet the comps yourself.……………
To read more, Click Here
My comments: Worth reading the entire article. What AI can do.
What Appraisers can do, with and without AI.
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Home Made Entirely Out of Shipping Containers Hits the Market for $5.2 Million in New Hampshire
Excerpts: 4 bedrooms, 5.5 baths, 5,120 sq.ft., 141 acre lot, built in 2024
Made entirely from 15 shipping containers. “The homeowners carefully calibrated the home taking into consideration the quiet character of the town,” says Corriveau. “The home is meticulously crafted using an alternative construction method of being built from 15 retrofit steel cargo shipping containers that have been seized, anchored, reinforced, and supported by top-grade building components and highest standards of trade practices, to create a luxury mountaintop home.”
… modern details, built-ins, exposed industrial metals and materials, superior lines and angles, and all the amenities, luxuries, and comfort you didn’t know you needed.”
To read more, Click Here
To see the listing with 60 photos and virtual tour, Click Here
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FHA Handbook Updated
8-13-25 FHA has updated the 4000.1 Handbook that incorporates the changes in Mortgage Letter 2025-18 – Rescission of Outdated and Costly FHA Appraisal Protocols, 6-27-25, Effective Immediately. Contains details of appraisal changes.
To read the Mortgage Letter 2025-18, Click Here
The page numbers have changed, so ensure you are referencing the latest information.
To read the full updated handbook, Click Here
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From UAD 2.6 to 3.6. What appraisal software vendors are doing
In the July 2025 issue of Appraisal Today
Excerpts:
Why did the GSEs go to UAD 3.6?
The GSEs wanted more and better structured data for their analytical
software. They also want structural data capture and eliminating inconsistency in appraisals. In UAD 2.6, the GSEs started using codes/abbreviations which helped some.
They also wanted “dynamic” reports that only include what is relevant to the
appraisal. For example, if the Cost Approach is not used it does not appear in the report.
Many appraisals had long addendums. GSEs could not obtain data from it.
In UAD 3.6, text fields are located next to the topic.
Why are the software vendors doing the new software?
So they can stay in business.
Why are appraisers learning how to use the new software?
So they can stay in business..
The GSEs included the data they wanted. If you want to do GSE appraisals
you must use UAD 3.6.
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The New Appraisal Report: How One Company Is Rethinking Appraisal Software
How are appraisal software providers retooling their products for UAD 3.6? One provider, Jeff Bradford, shares his thinking.
By Bryan Reynolds
Excerpts: In the Appraisal Update podcast, I’m always talking about the “train of change” coming to the appraisal world. If you’re an appraiser, you probably rolled your eyes. We’ve heard this before, right? For years, people have said “change is coming,” but then… nothing. Same forms, same software, same grind.
But it’s real this time. The train is pulling into the station.
I want to talk about a video from late last year that’s gotten a lot of attention, even from the GSEs. I think it struck a chord. So let’s talk about what it is, who created it, and why.
A couple of years ago, when the GSEs first announced the new UAD rollout, they effectively hit the reset button for everyone in appraisal tech. Software companies had been in the business of form-filling: They helped appraisers build reports by filling in forms, attaching images, adding addendums, and producing a PDF.
Suddenly, the software companies are staring down a whole new paradigm.
To read more , Click Here
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Bradford has a new video showing how his new software works – Appraising Imagined
I had live demos of what 3 software vendors are doing: SFREP, a la mode, and Bradford, for an article in the July,2025 issue of Appraisal Today: From UAD 2.6 to UAD 3.6. What appraisal software vendors are doing. See excerps above from the article.
I was able to see what Bradford was working on using two test addresses I provided. But, I was not able to write about the details of this new software because it was not completely ready to go.
The software has links to many data sources, such as permit history which are used to see what is happening before you go to the inspection.
Fortunately now you can see what Bradford has done from accepting the order to producing the appraisal reports at:
www.bradfordsoftware.com/NIGHTHAWK/ 18.5 minutes long.
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A Primer on Regulations and the Practice of Residential Property Appraisal from 1900 to now, March 2024
Excerpts: When a significant amount of money is involved in the ownership transfer of an asset, the principals to the transaction might appreciate an independent opinion of the asset’s value. So, as the demand for single-family homes grew in the United States during the early 1900s, residential appraisal slowly blossomed from a job into a profession and became an important occupational specialization. Despite their important role in the mortgage origination process, throughout most of the 20th century appraisers escaped the attention (and regulation) that Congress devoted to other parties in the process, especially commercial banks and other suppliers of mortgage funds.
In the United States, the real estate appraisal industry operated largely under the radar of state and federal regulatory authorities for over a century. Real estate appraisers worked closely with mortgage loan originators who were the frequent target of the United States Congress and the agencies it created to monitor and regulate them. Appraisers, on the other hand, were left to their own devices to provide informed property value estimates without the benefit of government-imposed rules and regulations.
Nobody knows with certainty the reason(s) behind the formation of every one of the numerous professional appraisal associations, formed during the 20th century, each claiming they would be the best organization to represent the interests of appraisers. Hopefully, each association organizer was motivated by a sincere desire to benefit the appraisal industry. Some, however, may have been motivated for less altruistic reasons. In any event, these professional associations helped stave off government regulation by setting and enforcing rules on their membership.
To read the full report Click Here
My comments: The academic analysis has text, data tables and links to more information. Starts in 1900. Very interesting (for appraisers especially). Today, appraisal regulators are in the news, such as “Senators Say Appraisal Regulator ‘Chaos’ Risks Undermining Real Estate Markets” July 25, 2025.
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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 in 2025.
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Mortgage applications decreased 1.4 percent from one week earlier
Mortgage applications decreased 1.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 15, 2025.
The Market Composite Index, a measure of mortgage loan application volume, decreased 1.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 23 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 23 percent higher than the same week one year ago.
“Mortgage rates increased slightly last week, with the 30-year fixed rate now at 6.68 percent. Applications were down as a result, driven by a 16 percent decrease in VA applications, which are typically a volatile segment of the market,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
“FHA refinance applications increased over the week, as the FHA rate, at 6.39 percent, remained competitive relative to other loan types. Purchase applications were little changed over the week but were at the strongest pace in four weeks and continued to run well ahead of last year’s pace. Prospective homebuyers remain more active compared to last year despite economic headwinds and uncertainty and affordability challenges.”
The refinance share of mortgage activity decreased to 46.1 percent of total applications from 46.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 8.6 percent of total applications.
The FHA share of total applications increased to 19.1 percent from 18.4 percent the week prior. The VA share of total applications decreased to 13.4 percent from 14.2 percent the week prior. The USDA share of total applications increased to 0.6 percent from 0.5 percent the week prior.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.68 percent from 6.67 percent, with points decreasing to 0.60 from 0.64 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $806,500) decreased to 6.64 percent from 6.70 percent, with points increasing to 0.60 from 0.56 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 6.39 percent from 6.40 percent, with points decreasing to 0.66 from 0.77 (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 increased to 5.96 percent from 5.93 percent, with points increasing to 0.70 from 0.63 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
The average contract interest rate for 5/1 ARMs increased to 6.01 percent from 5.80 percent, with points decreasing to 0.63 from 0.67 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
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.
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Ann O’Rourke, MAI, SRA, MBA
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