Hybrid Appraisal Adoption Now 19% for Lenders Using UPD

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hybrid appraisal adoption

This article reviews GSE hybrid appraisal adoption trends in 2025.

A hybrid appraisal relies on successful submission of a Uniform Property Data (UPD) Report, an on-site property inspection completed by a property data collector. The appraiser uses the UPD to complete the hybrid appraisal.

In October 2024 the FHFA announced expanded eligibility of appraisal alternatives including the introduction of hybrid appraisals to the GSE selling guides. Prior to this hybrid appraisals had been tested extensively by many lenders over a 5+ years in GSE pilot programs.

Fannie Mae introduced hybrid appraisal offers in March 2025, with eligibility being close to that for traditional appraisals. Freddie Mac followed close behind, with hybrid appraisal offers starting in early April 2025. Market feedback is that hybrid appraisal offer rates are currently higher with Fannie Mae.

Hybrid Appraisal Adoption – Survey Sample

This data is from the MtgeFi Hybrid Appraisal survey and a nationwide sample of 313 GSE lenders – 172 sellers, 78 correspondents and 63 mortgage brokers – all for 2025 originations. The sample includes 230 non-banks, 57 banks and 26 credit unions. This represents 26.8% of all GSE sellers and correspondents actively placing UPD orders.

Total Hybrid Appraisal Adoption

In the 2 full quarters since availability, and for the sample described above, 7 of the top 20 GSE lenders by direct origination volume are ordering hybrid appraisals:

  • 61 lenders (19.5%) ordered hybrid appraisals, including:
    • 50 nonbank lenders (21.7%) – including 7 of the top 20 direct GSE originators, and comprising 38 direct sellers and 13 correspondents
    • 9 banks (15.8%) – including a top 5 bank, and 4 additional banks in the top 20 when ranked by GSE originations
    • 2 credit union (7.7%) – including a top 20 credit union when ranked by GSE originations

A number of larger bank and nonbank lenders have been slowly ramping utilization of hybrid appraisals in the past 6 months. This is to complement traditional appraisals, build production experience with a new valuation process, and to address current performance and coverage issues that persist.

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GSE Dual-AUS Agency Strategy

For 1st lien single family mortgages lenders often operate a ‘Dual Automated Underwriting System (AUS)’ agency strategy, running loan applications through both Fannie Mae (Desktop Underwriter, or DU) and Freddie Mac (Loan Product Advisor, or LPA) simultaneously. Alternatively they may direct loan applications to a single GSE.

The number of unique lenders ordering hybrid appraisals:

  • 28 lenders (45.2% of all) submitted to both GSEs
    • 44 lenders (70%) submitted to Fannie Mae only
    • 7 lenders (24%) submitted to Freddie Mac only

The total count exceeds 100% as the data tracks all instances of an individual lender submitting to Fannie Mae, Freddie Mac and using a dual-AUS strategy.

Geographic Concentration

Hybrid appraisal adoption based on order volumes by State are aligned with overall GSE loan volumes and traditional appraisals.

Future analysis will include an assessment of the rural vs urban order mix.

hybrid appraisal adoption

Non-Agency Lending & Other Services

In addition to GSE origination and servicing, hybrid appraisals are being utilized in non-agency lending, and other forms of housing finance and asset management.

The UPD report format, scanning technology and property data collection process is now flexible enough to support multi-purpose inspections that can be efficient for non-QM lending and asset managers. Further, Non-QM lenders can now utilize hybrid appraisals with their specialized direct engagement appraiser panels.

A single on-site property inspection can generate a UPD Report for a hybrid appraisal to support a home loan, plus generate additional reports and information that can be used in sale & rental listings, home inspections, underwriting and marketing ancillary products and services.

Hybrid Appraisal Adoption – Learn More

For lenders who wish to learn more, here are links to further information about hybrid appraisals, and lists of GSE approved and/or integrated UPD providers: