Appraisal Modernization FAQ

Appraisal modernization represents Freddie Mac’s independent research, assessment and planning for improving collateral valuations.

Our goal is to deploy new valuation methods that promote consistent valuation outcomes, are more efficient and improve collateral risk decisions.

Freddie Mac is evaluating numerous opportunities, enhancements and alternatives to provide efficiency and maintain risk mitigation. These modernization efforts include evaluating the use of:

• appraisal opportunities that can reduce turn times and help support appraiser capacity concerns nationwide.
• alternative methods in the development of the appraisal that more efficiently and effectively complete the appraisal report, reduce risk and increase transparency.
• computer vision and text mining as an alternative method of identifying property condition, updates, upgrades and needed repairs.
• aerial images to identify possible adverse site locations that may impact value and marketability of a property.
• text mining and property undervaluation to identify possible bias.
• applications that use 2D and 3D to create floor plans and promote consistency in the measurement of gross living area (GLA).
• developing an opinion of value that replaces the sales comparison grid approach that uses big data analysis completed by an appraiser.

The GSEs are collaborating to update the UAD, retire the existing appraisal forms, and redesign the Uniform Residential Appraisal Report (URAR). This initiative is part of the Uniform Mortgage Data Program® (UMDP®), a joint-GSE effort to enhance data quality and standardization at the direction of FHFA.

You can learn more about this initiative on our UAD web page.