Earlier this month, the government-sponsored enterprises (GSEs) launched the new Uniform Property Dataset (UPD). Dan McAlister, vice president of product management at Clear Capital, outlined some specifics surrounding the UPD launch and how they will affect the appraisal profession moving forward.

“The Uniform Property Dataset is required for both Freddie Mac’s ACE+ PDR solution and Fannie Mae’s Value Acceptance + Property Data for loan applications submitted on or after April 1,” McAlister told Valuation Review. “Originally announced in July 2023, UPD is a response to industry feedback requesting market standardization and fungibility for GSE inspection-based waiver solutions.”

“Vendors providing property data collection services and/or technology solutions undergo rigorous testing from both Freddie Mac and Fannie Mae to ensure the collection of data at the property, submission of the data to GSE-specific APIs, and presentation of the data in the PDF accurately delivers the UPD,” McAlister added.

April 1 was the deadline for implementation of UPD. For loan applications on and following April 1, McAlister noted, loans delivered to Freddie Mac using ACE+ PDR and Fannie Mae using Value Acceptance + Property Data must have a property data collection performed that delivers UPD. The GSEs started accepting the UPD in December 2023.

As to some basic background information pertaining to property data collection (PDC) and how property data collections are used, the Clear Capital executive shared that property data collection is the act of physically or virtually observing and reporting property characteristics in a fact-based manner by a trained and vetted data collection professional. Property data collection is not an appraisal in that it does not involve the development of an opinion of value.

“Property data collections enable GSE inspection-based waiver solutions and hybrid appraisal test-and-learns. An inspection-based waiver provides an alternative to a traditional appraisal where the lender only needs to supply a property data collection to validate the condition of the property,” McAlister said. “Specifically, Freddie Mac’s ACE+ PDR solution and Fannie Mae’s Value Acceptance + Property Data require that a property data collection delivering the UPD is collected and submitted electronically via GSE-specific APIs.”

Regarding how this launching will affect the appraisal profession, McAlister told us that UPD promotes adoption of inspection-based waivers by providing consistency between Fannie Mae and Freddie Mac requirements.

“Prior to implementing UPD, the GSEs each had proprietary data standards, which created challenges for lenders who prefer to have fungibility between selling the loan to Fannie Mae or Freddie Mac,” he said. “Additionally, for appraisers performing hybrid appraisals, UPD standardizes the property data that is provided to the appraiser, creating efficiency and trust in the process.”

“The primary goal of UPD is to enable adoption of inspection-based waivers (IBWs), which means less loans requiring a traditional appraisal. It would be understandable for appraisers to have some initial concerns, as UPD represents a maturation of appraisal alternatives. However, appraisers can provide property data collection services too. For those engaging in this work, UPD makes the on-site data collection requirements more clear and transparent,” McAlister added. “Also, UPD improves the experience for appraisers completing hybrid appraisals. Though hybrid appraisals are still limited to GSE test-and-learns, they are likely to become more pervasive in the coming years, creating new opportunities for appraisers.”

What does all this mean for the valuation space? McAlister stressed that UPD is extremely detailed and rigorously defined to be thorough and adaptable to the broad array of unique property features that exist in the U.S. housing stock.

And he went on to say, UPD will create efficiency in the development of hybrid appraisals, and though many appraisers are not interested in this type of work, there are also many appraisers who would prefer to build their business around hybrid assignments.

But how will this enhance data quality and consistency in property data collection?

“Prior to UPD implementation, Fannie Mae and Freddie Mac had separate, proprietary data standards for IBWs and hybrid appraisals,” McAlister said. “Some property data collection vendors, such as Clear Capital, created products that combined both GSE data sets to provide lenders with fungibility. Other vendors created two separate data collection products for each GSE. This paradigm created friction for lenders and appraisers consuming data collection products because each vendor had its own spin on it. Now, all industry participants can really hone in on accurately delivering UPD.”

In closing, to differentiate UPD from UAD (Uniform Appraisal Dataset), McAlister shared that UPD defines the required data elements for property data collection, whereas UAD defines the required data elements for appraisals.

“Remember, property data collections don’t include a conclusion of value and all that comes with it; comparables, market analysis, and value conclusion. However, appraisers would be wise to familiarize themselves with UPD as a precursor to UAD 3.6, as the approach to property data is very similar,” McAlister said. “To slightly oversimplify, UPD creates a framework where a property has structures, structures have rooms, rooms have features, features have materials, and materials have a condition rating and associated photo. This same framework is utilized in UAD 3.6, which will create even more alignment and standardization across traditional appraisals and appraisal alternatives.”