Home appraisals can be difficult to read and interpret, unless you know about the codes appraisers use on their appraisal form. This article will help you decipher what the appraiser is telling your lender about your home.
UAD Codes used by Appraisers
UAD is an acronym that stands for Universal Data Set, and is sometimes found as “code” on residential home appraisals. Appraisers that are preparing residential appraisals that will be sold to Freddie Mac (Federal Home Loan Mortgage Corporation), and Fannie Mae, (Federal National Mortgage Association), are required to use these codes for appraisals that are ultimately going to be sold to to them.
These “codes” can make interpreting the appraisal difficult for those not in the business, but this article will provide you with everything you need to know to to interpret your appraisal, (which you can get from your lender upon request).
Condition ratings are the appraisers interpretation of the condition of your property. There are 6 categories, and from best to worst, they are as follows:
C1 – The improvement has been recently constructed or has not been previously occupied. The entire structure and all improvements are new with no physical depreciation.
C2 – The improvements have no deferred maintenance, little or no physical depreciation, and have no required repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated.
C3 – The improvement is well maintained, but have some physical depreciation due to normal wear and tear. As a well maintained building, some components may have been recently updated.
C4- The improvements have minor deferred maintenance and physical deterioration due to normal wear and tear. The building has been maintained and requires only minimal repairs to building components, and may have a need for cosmetic repairs.
C5 – The improvements have obvious deferred maintenance and is in need of some significant repairs. The livability is diminished due to condition, but the dwelling is usable and still functions are a residence.
C6 – The improvements have damage or deferred maintenance severe enough to impact the safety or structural integrity of the improvements. The improvements need significant repairs to major components.
In addition to condition ratings, the appraiser will also assign a quality rating to your home. Like condition ratings, there are 6 categories, and from best to worst, they are as follows:
Q1 – These are unique homes usually designed by an architect for a specific buyer. The property typically have exceptionally high levels of workmanship and high-grade materials throughout the interior and exterior of the building.
Q2 – These residences can be found in high-quality tract developments constructed from individual plans. They have high quality exteriors and interior refinements, with high quality workmanship.
Q3 – These residences are built from readily available plans and can be found in above standard developments. They have good finishes, and the workmanship exceeds average standards, with finishes that have been upgraded from “stock” standards.
Q4 – These residences meet or exceed the applicable building codes, using standard or modified building plans. They have adequate interior improvements. Materials, workmanship, and finish are of stock or guilder grade, but may have some upgrades.
Q5 – These residences have economy construction and are built from plans that are readily available. they have basic finishes with minimal exterior ornamentation, using stock materials.
Q6 – These residences are of basic quality and lower cost, some of which may not be suitable for year round occupancy. Buildings are constructed from simple plans or no plans, utilizing the lowest quality building materials. Construction is often by unskilled labor, and may feature one or more non-conforming additions to the original structure.