On the new URAR you rate the exterior and the interior of the dwelling separately, each for quality (Q1 to Q6) and condition (C1 to C6), and then give an overall quality and condition rating. The GSEs' definitions are absolute: a rating describes the property itself, not how it compares to the neighborhood. The rating is always the appraiser's call. This page explains where each one goes and what the definitions say.
Where do the ratings go?
| Rating | Where it is reported |
|---|---|
| Exterior quality and exterior condition | Dwelling Exterior section (Report Field IDs 8.022 and 8.023) |
| Interior quality and interior condition | Unit Interior section (10.034 and 10.035) |
| Overall quality and overall condition | Overall Quality and Condition section (15.000 and 15.005), also shown in the Summary, with a reconciliation comment (15.010) |
Each building's exterior gets its own ratings, and each unit's interior gets its own, an accessory dwelling unit included. The sales grid carries the exterior, interior and overall ratings for each comparable.
What do the condition ratings mean?
The GSE definitions, condensed. Read the full criteria in the GSEs' Condition and Quality Rating Definitions before you rate.
| Rating | In short |
|---|---|
| C1 | Newly built in the past 12 months, never occupied, no signs of wear or use. The foundation is 100% original to the new construction. |
| C2 | Like new. Recently built, or entirely remodeled within 36 months, with no deferred maintenance and no repairs needed. |
| C3 | Well maintained with minimal wear, or most (but not every) major component updated. |
| C4 | Adequately maintained with moderate wear. Some updating may be present; deferred maintenance is generally minor or cosmetic. |
| C5 | Significant wear from inadequate maintenance. Some items need repair, rehabilitation or replacement soon, but the dwelling still supports occupancy. |
| C6 | Severe damage or defects that affect soundness or structural integrity. Not suitable for occupancy. |
What do the quality ratings mean?
The GSEs' quality chart has separate criteria for overall, interior and exterior quality. Below is the overall column, condensed. Read the interior and exterior criteria in the chart before you rate them.
| Rating | In short |
|---|---|
| Q1 | Individually designed, one of a kind, built to exacting standards with exceptional materials and workmanship. |
| Q2 | High quality, often from customized or complex plans, with upgraded, high-end and luxury materials and high-quality workmanship. |
| Q3 | A higher than standard degree of complexity and some customization, with a mix of premium and standard materials. Often semi-custom. |
| Q4 | Standard plans that can be reproduced many times with minimal customization, using widely available materials. |
| Q5 | Basic design that meets minimum building standards, with minimal refinements. Not substandard. |
| Q6 | Lacks basic architectural design and may not meet local building standards, with low quality or non-customary materials. |
For each quality rating, the property must meet the majority of the listed criteria, not every one.
Where do people get tripped up?
- A rating that does not match the details. The GSEs' lessons-learned job aid shows a report listing missing floor coverings as a defect with no action needed. By definition, missing floor coverings point to C5 as is, or C4 if the appraisal is made subject to installing them.
- New construction marked Not Updated. For new construction, the Update Status for kitchens, bathrooms and flooring should be Fully Updated, a change from UAD 2.6, so the report supports a C1 rating.
- Rating against the neighborhood. The definitions are absolute. Compare the property to the definition, not to the houses around it.
Questions appraisers ask
Do I still give one condition and one quality rating?
No. You rate exterior quality and condition for each building, interior quality and condition for each unit, an accessory dwelling unit included, and then give an overall quality and condition rating that pulls them together.
Are the ratings relative to the neighborhood?
No. The GSE definitions say ratings describe the property on an absolute basis, not on a relative basis or how it relates to other properties.
Do the same definitions apply to interior, exterior and overall?
For condition, yes. One set of condition definitions is used for overall, exterior and interior condition. For quality, the GSEs' chart gives separate criteria for overall, interior and exterior quality.
Does a property have to meet every criterion of a quality rating?
No. The GSE definitions say the property must meet the majority of the criteria listed for a rating, not all of them.
Sources
- Fannie Mae and Freddie Mac, UAD Condition and Quality Rating Definitions, version 1.0 (April 29, 2025), a copy of the ratings published in Appendix F-1, on Fannie Mae's UAD page
- Fannie Mae and Freddie Mac, Appendix A-1, UAD Delivery Specification for the URAR, version 1.4, Report Field IDs 8.022, 8.023, 10.034, 10.035, 15.000, 15.005 and 15.010, on Fannie Mae's UAD page
- Fannie Mae and Freddie Mac, UAD 3.6 Job Aid: Guidance for Appraisers through Lessons Learned, version 1.0 (June 23, 2026), lessons 10 and 11, on Fannie Mae's UAD page