Property data collection requires viewing and reporting property characteristics in a fact-based manner. It’s not an appraisal or appraisal report and doesn’t involve the development of an opinion of value. Property data reports (PDRs), the product of property data collection, are used to inform alternative collateral valuation options offered by Freddie Mac.

Freddie Mac’s spectrum of collateral valuation options

Freddie Mac is focused on developing collateral valuation options that promote consistent outcomes, simplify the loan manufacturing process and reduce costs for borrowers and Sellers while effectively managing risk.

PDRs are completed by trained property data collectors that report fact-based property information in accordance with standardized data requirements. During the development of PDRs, Freddie Mac tested the use of various professionals to collect property data, photos and floor plans and observed improved risk management with PDRs when compared to traditional appraisal reports. Automated collateral evaluation plus property data report (ACE+ PDR) and hybrid appraisal reports both leverage PDRs.

Current focus on property data collection

Several factors have driven the use of property data collection in recent years:

Safely and soundly expanding collateral valuation options – As noted earlier, Freddie Mac is focused on developing collateral valuation options in a responsible manner. Property data collection helps introduce alternatives to the traditional appraisal report while effectively managing risk. In fact, when reviewing data from our hybrid appraisal test-and-learn, appraisers developing hybrid appraisal reports using PDRs were about 2 times more likely to appropriately identify Freddie Mac’s condition or quality eligibility requirements when compared to appraisers developing traditional appraisal reports. The appraiser benefits from the PDR that’s structured to capture more information, defined data elements and specific photographs as part of the data collection.

Traditional appraisal reports are, and will remain, an integral part of the loan manufacturing process. We’re also able to leverage proprietary models, historical data and public records to provide current market value and inform alternative collateral valuation options. Risk decisions from these alternatives must be at least as good, if not better, than those for traditional appraisal reports.

Improving outcomes for borrowers and Sellers – Freddie Mac is focused on developing solutions that provide tangible benefits for borrowers and Sellers.

  • PDRs (which cost $200 on average), when used with ACE+ PDR, can save borrowers nearly $400 when compared to traditional appraisal reports (which cost $600 on average).
  • ACE+ PDR can help Sellers close loans faster – on average 12 days faster for purchases and 10 days faster for refinances.
  • Sellers can receive appraised value representation and warranty relief.

Appraiser capacity concerns – While recent loan volumes haven’t stressed appraiser capacity, during busy times and in certain areas, the demand on the declining appraiser population can be significant. The resulting delays can impact market stability and liquidity. Property data collection can help address this by informing ACE+ PDR and allowing appraisers to develop hybrid appraisal reports more efficiently using a PDR rather than visiting the property themselves.

Technological advancements – Emerging tools and technology – like sophisticated mobile applications used by data collectors and automated sketch technology – have enhanced the reliability, efficiency, consistency and accuracy of the property data collection process.

Third-party data collection – Technology has simplified the collection of property information, allowing for the use of independent work forces that can be specifically trained to gather accurate property data. We discuss requirements for property data collectors and Seller oversight of data collectors below.

The components of property data collection

Property data collection requires identifying and reporting property characteristics detailed in the Uniform Property Dataset (UPD), including but not limited to:

  • Providing information on both the interior and exterior of the property.
  • Identifying and reporting design features that impair the use of the subject property and cannot easily be changed (e.g., access to a bedroom only through another bedroom).
  • Identifying and reporting factors adjacent to the subject property that are potentially adverse or beneficial for the location.
  • Measuring the dwelling unit(s) and any other structures on the subject property to produce building sketches and floorplans.
  • Collecting a comprehensive set of photographs of the subject property.

UPD: A dataset for property data collection

In collaboration with industry partners, Freddie Mac and Fannie Mae (the GSEs) worked together to develop the UPD, a standardized format for organizing and managing property data that is designed to support the production of accurate, factual and consistent property data. The UPD was published in 2023, and both GSEs began requiring it for PDRs on April 1, 2024. Since then, the GSEs also collaborated on a standardized output for the UPD; the Uniform Property Data Report (UPDR) also delivers efficiencies by ensuring consistency when Sellers review PDRs.

This framework and standardized process enables independent third-party collection of property data, including images and a floor plan of the subject property.

Property data collector requirements

Property data collectors must complete required training, must undergo periodic criminal background checks and are subject to Seller oversight. Engagement of property data collectors is covered by independence requirements that are very similar to the Appraiser Independence Requirements (AIR) for appraisers. Licensed/certified appraisers or appraiser trainees are also able to serve as property data collectors. Freddie Mac lists on its website providers that support the UPD and integration and verification requirements for the PDR.

Protecting the independence of property data collectors
Just as with appraisers, the independence of property data collectors is vital to the role they play in the process. As part of updates to AIR in August 2023, the GSEs published Property Data Collection Independence Requirements (PDCIR) to safeguard the independence, objectivity and impartiality of property data collectors and other independent parties throughout the property data collection process. The PDCIR are detailed in Freddie Mac Single-Family Seller/Servicer Guide (Guide) Exhibit 42.

Property data collector training
Guide Section 5603.6 details requirements for property data collector training, oversight and criminal background checks. Property data collectors must complete training in all aspects of property data collection and the UPD. Sellers are responsible for both the accuracy and reliability of the PDR and the oversight and training of property data collectors.

Seller oversight of property data collectors
PDRs must be reviewed and underwritten, just like appraisal reports. Seller responsibilities include the accuracy and reliability of the PDR and to ensure any data provided by the property data collector to an appraiser appears to be accurate and credible.

Requirements for Seller oversight of property data collectors are outlined in Guide Section 5603.6 and include, but are not limited to:

  • Periodic criminal background checks.
  • Comprehensive training on preparing an accurate and thorough PDR.
  • Compliance with customer service standards or code of conduct.
  • A process for continuously evaluating property data collectors, including monitoring and documenting performance to identify and remedy any recurring deficiencies and discontinuing the use of chronically underperforming property data collectors.
  • A process for providing continuing education when appropriate (e.g., significant changes are made to the UPD or the property data collection process).
  • PDRs must be included in quality control sampling.

Addressing privacy concerns

Privacy concerns and information security are important to Freddie Mac. Requirements for Information Security and Business Continuity Planning for Seller/Servicers that use third-party service providers are detailed in the Guide Chapter 1302. Among many requirements, Freddie Mac requires Seller/Servicers to implement and maintain policies to protect proprietary information, data and protected information.

Appraiser considerations: potential liability

Appraisers routinely use and consume third-party data when developing an opinion of value; such data may include, but is not limited to, multiple listing real estate services, tax records, public land records, online imagery, virtual street views, flood reports, and engineering reports.

Certifications specific to hybrid appraisal reports make it clear to the reader of the hybrid appraisal report that the appraiser:

  • Did not perform a personal visual inspection of the subject property.
  • Relied on data provided by third parties.
  • Has examined and verified the data and data sources to determine reliability.
  • Makes no guarantees, express or implied, regarding the accuracy of the data.

Like any other third-party information consumed, appraisers are required to review and verify data and data sources to determine reliability and credibility.

Summing it up: take advantage of property data collection

If you’re a Seller not already taking advantage of property data collection by using ACE+ PDR or hybrid appraisal reports in your collateral valuation process – now is the time to start. While current volumes might not have a major impact on appraiser capacity, you don’t want to wait until the market changes to start implementing ACE+ PDR (and even hybrid appraisal reports) into your process.

Learn more about ACE+ PDR, confirm your vendors support it and make sure your loan originators know how to identify opportunities to use it. Adding ACE+ PDR and hybrid appraisal reports to your operations will help you keep pace with your competition and allow you – and your borrowers – to take advantage of the benefits it can provide.