In preparation for retiring legacy appraisal forms, Fannie Mae has updated their Selling Guide with 3.6 policy changes. One policy change that will impact appraisers is the Highest and Best Use requirement. Per Fannie Mae:
This policy updates the highest and best use requirements for appraisal reports completed using Uniform Appraisal Dataset (UAD) 3.6. These changes apply only to UAD 3.6 appraisal assignments to support the new Uniform Residential Appraisal Report (URAR) reporting requirements and do not apply to appraisal reports completed using legacy appraisal report forms.
We updated our policy to:
• require the property’s highest and best use, as improved or as proposed, to be a residential use, rather than requiring it to be the property’s present use;
• define present use, residential use, and subordinate use in the context of highest and best use;
• require the property to be a primarily residential one- to four-unit property, with any non-residential use subordinate to the residential use, replacing the previous “residential in nature” guidance; and
• establish the eligibility criteria and reporting requirements for one- to four-unit residential properties when the present use does not satisfy one or more of the highest and best use tests.
Today’s announcement also includes updates on their rental income policy and an expansion of Native American Conventional Lending Initiatives.
This policy update is effective immediately for all 3.6 orders. The Fannie Mae Selling Guide has also been updated with all current UAD 3.6 policy updates.
Here is the full Fannie Mae Selling Guide Announcement 09/02/26.
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