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Here's what the condition ratings C1 through C6 actually mean: **C1** is brand-new construction, completed within the past 12 months, never occupied, with no wear at all. **C2** is like-new condition—either recently built within the past 36 months or fully remodeled to the studs, with no deferred maintenance needed. **C3** is well-maintained with only minor wear and tear, possibly with some major components updated (roof, kitchen, bathroom) but not a full home renovation. **C4** means adequately maintained with some deferred maintenance and minor to moderate repairs needed, though major systems still function. **C5** shows obvious deferred maintenance requiring significant repair after a long period of neglect. **C6** means substantial damage or deferred maintenance affecting safety, soundness, or structural integrity—and because of this, Fannie Mae requires that any C6 property be appraised "subject to" repairs bringing it down to at least C5, while VA says appraisers should not assign C5 or C6 ratings at all on VA origination appraisals since those are prepared "subject to" repairs anyway. Straight from Fannie Mae Selling Guide (p. 592), UAD 3.6 / URAR (p. 348), and VA Lenders Handbook Pamphlet 26-7 (p. 397) — nothing added.

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© Copyright Notice: © Fannie Mae. UAD 3.6 / URAR reference materials shown for research and reference only. Full documents available at fanniemae.com/uad. Reproduction restricted per Fannie Mae copyright policy.

Chief Appraiser Picks · Related Videos An Inside Look at UAD 3.6 (Fannie Mae) Appraisal Property Condition Ratings: C1, C2, C3, C4, C5, C6 (OfferMarket)

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#1 Freddie Mac Seller/Servicer Guide Page 1

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SOURCE: Chief Appraiser Knowledge Base — Freddie Mac Property Condition and Quality Ratings (C1-C6 / Q1-Q6) Compiled from: Freddie Mac Single-Family Seller/Servicer Guide, Section…

Freddie Mac Seller/Servicer Guide · Property_Condition_and_Quality_Ratings.txt · Page 1 · View at official source (guide.freddiemac.com) →

SOURCE: Chief Appraiser Knowledge Base — Freddie Mac Property Condition and Quality Ratings (C1-C6 / Q1-Q6) Compiled from: Freddie Mac Single-Family Seller/Servicer Guide, Section 5605.5 (Improvements Analysis); the joint Fannie Mae/Freddie Mac Uniform Appraisal Dataset (UAD) Appendix D, Condition and Quality Ratings (the same standardized rating scale both GSEs require appraisers to use, adopted by Freddie Mac into this section of its own Guide); Freddie Mac's public "Q&A with Freddie Mac's Chief Appraiser: Getting it Right with Property Quality and Condition Ratings" article (sf.freddiemac.com). Compiled and added August 22, 2026, per Kelly, after the Internal Accuracy Testing Bot found "what does freddie mac say about property condition ratings" had NO real Freddie Mac content to draw from at all -- the Documents/Freddie_Mac folder previously contained only a placeholder file of instructions for manually downloading the full Guide (Freddie Mac does not publish it as a single PDF). This is a genuine, sourced summary of Section 5605.5's condition/quality rating framework, written in Chief Appraiser's own words from the sources above -- it is NOT a verbatim reproduction of Freddie Mac's copyrighted Guide text. Direct quotes below are short and attributed. Treat this as a solid working answer, not a substitute for pulling the live Guide section if word-for-word Guide language is ever needed. ===================================================================== Freddie Mac Property Condition and Quality Ratings (C1-C6 / Q1-Q6) Freddie Mac's Single-Family Seller/Servicer Guide, Section 5605.5 (Improvements Analysis), requires appraisers to assign a property two separate, standardized ratings: a Condition rating (C1 through C6) and a Quality rating (Q1 through Q6). These are the same UAD-standardized ratings Fannie Mae requires on the same appraisal forms -- Freddie Mac and Fannie Mae adopted one shared scale precisely so a single appraisal report works for either investor. Condition (C1-C6) measures how well the improvements have been maintained, independent of their age or original construction quality. In summary: C1 — new construction, never occupied, no physical depreciation. C2 — no deferred maintenance, little to no physical depreciation; either new or recently, completely renovated. C3 — well-maintained; minor physical deterioration from normal wear and tear; adequately maintained. C4 — some deferred maintenance and physical deterioration; minor to moderate repairs needed; all major building components still function. C5 — obvious deferred maintenance; needs significant repair; maintenance has likely been deferred for a long period. C6 — substantial damage or deferred maintenance, with deficiencies affecting the safety, soundness, or structural integrity of

#2 Fannie Mae Selling Guide Page 592

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Level of Updating Description Remodeled Significant finish and/or structural changes have been made that increase utility and appeal through complete replacement and/or expansion.…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 592 · View at official source (selling-guide.fanniemae.com) →

Level of Updating Description Remodeled Significant finish and/or structural changes have been made that increase utility and appeal through complete replacement and/or expansion. A remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation of plumbing/gas fixtures/appliances, significant structural alterations (relocating walls, and/or the addition of square footage). This would include a complete gutting and rebuild. Appraisals Completed “As Is” Fannie Mae permits appraisals to be based on the “as is” condition of the property provided existing conditions are minor and do not affect the safety, soundness, or structural integrity of the property, and the appraiser’s opinion of value reflects the existence of these conditions. Minor conditions and deferred maintenance are typically due to normal wear and tear from the aging process and the occupancy of the property. While such conditions generally do not rise to the level of a required repair, they must be reported. Examples of minor conditions and deferred maintenance include worn floor finishes or carpet, minor plumbing leaks, holes in window screens, missing handrails, or cracked window glass. Properties with condition ratings C1, C2, C3, C4, and C5 as previously defined are eligible in “as is” condition. Properties with the initial condition rating C6 indicate one or more deficiencies that impact the safety, soundness, or structural integrity of the property. Therefore, the appraisal must be completed "subject to" completion of the deficient item(s) with a minimum resulting condition rating of C5. See Physical Deficiencies That Affect Safety, Soundness, or Structural Integrity of the Subject Property in this topic for additional details when completing appraisals on properties with safety, soundness, or structural integrity deficiencies. Quality of Construction Rating For appraisals required to be completed using the UAD, the appraiser must assign one of the following standardized quality ratings in the table below when identifying the quality of construction for the subject property and comparable sales.

#3 UAD 3.6 / URAR (FNMA) Page 348

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Appendix 2: Condition and Quality Rating Definitions Appendix F-1: URAR Reference Guide Page 348 of 375 Version 1.3 Appendix 2: Condition and Quality Rating Definitions Condition…

UAD 3.6 / URAR (FNMA) · Appendix F-1 URAR Reference Guide v1.3.pdf · Page 348 · View at official source (fanniemae.com/uad) →

Appendix 2: Condition and Quality Rating Definitions Appendix F-1: URAR Reference Guide Page 348 of 375 Version 1.3 Appendix 2: Condition and Quality Rating Definitions Condition Rating Definitions Condition Ratings describe the physical condition of a property as of the effective date of the appraisal on an absolute basis, not on a relative basis or how a property relates to other properties. Condition Rating definitions are used for Overall Condition, Exterior Condition, and Interior Condition. Condition Rating Definitions Rating Condition Rating Definition Criteria C1 The dwelling is 100% newly constructed, completed within the past 12 months, has never been occupied, and exhibits no signs of wear or use. A dwelling in C1 condition: • Has a foundation that must be 100% original to the new construction. • May include non-structural components composed of “like new” recycled materials (e.g., reconditioned or refinished barn wood). • Is a 100% newly constructed dwelling that does not exhibit physical depreciation. C2 The dwelling exhibits like-new condition. It has been recently constructed or entirely remodeled within 36 months prior to the appraisal date, while retaining portions of the pre-existing structure. The dwelling may have been occupied but features no deferred maintenance and requires no repair. A dwelling in C2 condition: • Has been recently constructed (within the past 36 months), and otherwise exhibits virtually no wear and tear, but is no longer new due to occupancy or use (e.g., model home), or • Has been fully remodeled "to the studs" including new major components; a new dwelling built utilizing the footprint or façade of a pre-existing dwelling; or a newly converted condo/co-op in a pre-existing building. C3 The dwelling has been well-maintained and exhibits only minimal wear and tear. The dwelling may exhibit only minor age-related physical depreciation; or, most components, but not every major building component, has been updated or renovated. A dwelling in C3 condition will likely have: • Components or rooms that are older but have been very well maintained or experienced minimal use, and show little or no physical depreciation, or • Major components or rooms that have been recently updated, but which do not constitute a full-home renovation/remodel. Examples of major components include but are not limited to a combination of (one or more): • Newer roof • Some newer mechanicals • New / newer floor coverings • Remodeled kitchen or bathroom(s) C4 The dwelling has been adequately maintained and

#4 UAD 3.6 / URAR (FNMA) Page 135

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Unit Interior Appendix F-1: URAR Reference Guide Page 135 of 375 Version 1.3 Example 2: Level in Unit, Grade Level Type, and Area Breakdown: Example 2 Level in Unit 10.029 Grade…

UAD 3.6 / URAR (FNMA) · Appendix F-1 URAR Reference Guide v1.3.pdf · Page 135 · View at official source (fanniemae.com/uad) →

Unit Interior Appendix F-1: URAR Reference Guide Page 135 of 375 Version 1.3 Example 2: Level in Unit, Grade Level Type, and Area Breakdown: Example 2 Level in Unit 10.029 Grade Level Type 10.030 Possible Answers in Area Breakdown Level B2 Partially Below Grade • Below Grade Finished Area 10.006 • Below Grade Finished Area (Nonstandard) 10.007 • Below Grade Unfinished Area 10.008 Level B1 Partially Below Grade • Below Grade Finished Area 10.006 • Below Grade Finished Area (Nonstandard) 10.007 • Below Grade Unfinished Area 10.008 Level 1 Above Grade • Above Grade Finished Area 10.003 • Above Grade Finished Area (Nonstandard) 10.004 Quality and Condition Interior Quality and Condition ratings provide support to the Overall Quality and Condition Ratings (15.000, 15.005). Unit Interior: Quality and Condition Report Field ID Report Label When to Include Allowable Answers / Format Definition / Additional Guidance 10.034 Interior Quality Rating Always required Q1 to Q6 Reference Appendix 2: Condition and Quality Rating Definitions for definitions. Interior Quality Rating also displays in Overall Quality and Condition (15.004) and Sales Comparison Approach (22.09.03 and 22.10.02). 10.035 Interior Condition Rating Always required C1 to C6 Reference Appendix 2: Condition and Quality Rating Definitions for definitions. Interior Condition Rating also displays in Overall Quality and Condition (15.009), Sales Comparison Approach (22.09.10 and 22.10.09), and if applicable in Rental Information (23.03.10). Note: Reflects the condition as if any required repairs, inspections, or completions have been satisfactorily completed. 10.036 N/A Always displays N/A The tables below support the Interior Quality and Condition ratings and reflect the market value condition of this report

#5 VA Lenders Handbook (Pamphlet 26-7) Page 397

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Appraisal Report 11-19 13. Uniform Appraisal Dataset (UAD) Change Date February 22, 2019 • This Chapter has been revised in its entirety. a. Definition The UAD improves the…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 397 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Appraisal Report 11-19 13. Uniform Appraisal Dataset (UAD) Change Date February 22, 2019 • This Chapter has been revised in its entirety. a. Definition The UAD improves the quality and consistency of appraisal data by defining all fields required on specific appraisal forms and standardizes definitions and responses for a key subset of fields. Regardless of the geographic location of the property or any localized reporting conventions, the UAD standardization includes: • Formats for fields that include dates, values, and other data, • Allowable values from a list of choices provided for certain fields, • Abbreviations to allow more information to fit on printed appraisal forms, and • Ratings and definitions for the “Condition” and “Quality” of the property and “Updated/Remodeled” status. b. UAD- Compliant Forms Appraisals prepared on Fannie Mae Forms 1004, 1073, 1075 or 2055 must be UAD-compliant and must include the definitions for the property condition and quality ratings and the property description abbreviations used. c. VA Requires Closed Sales While the UAD may allow for the use of pending sales in the sales comparison grid, VA requires that only closed sales be used. d. Remodeling Information UAD requires appraisers to provide specific information regarding remodeling in the past 15 years. VA expects fee appraisers to recognize and describe remodeling or updating and to make appropriate adjustments. Fee appraisers should also report UAD information concerning the remodeling if it is available in the “normal course of business” within VA timeliness requirements for completion of the appraisal. e. UAD Condition Ratings Since origination appraisals are prepared “subject to” any repairs needed for the property to meet MPRs, UAD condition ratings of C5 and C6 are not appropriate.

#6 Fannie Mae Selling Guide Page 589

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✓ Requirements The appraiser must identify • items that require immediate repair; and • items where maintenance may have been deferred, which may or may not require immediate…

Fannie Mae Selling Guide · Selling Guide - 06-03-2026.pdf · Page 589 · View at official source (selling-guide.fanniemae.com) →

✓ Requirements The appraiser must identify • items that require immediate repair; and • items where maintenance may have been deferred, which may or may not require immediate repair. The appraisal Additional Comments section must address needed repairs and physical, functional, or external inadequacies. Property Condition Ratings For appraisals required to be completed with the UAD, the appraiser must assign one of the following standardized condition ratings in the table below when identifying the condition of the improvements for the subject property and comparable sales. Rating Description C1 The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation. Note: Newly constructed improvements that feature recycled materials and/or components can be considered new dwellings provided that the dwelling is placed on a 100 percent new foundation and the recycled materials and the recycled components have been rehabilitated/re-manufactured into like-new condition. Improvements that have not been previously occupied are not considered “new” if they have any significant physical depreciation (that is, newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep). C2 The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completely renovated and are similar in condition to new construction. Note: The improvements represent a relatively new property that is well-maintained with no deferred maintenance and little or no physical depreciation, or an older property that has been recently completely renovated.

#7 VA Lenders Handbook (Pamphlet 26-7) Page 384

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Appraisal Report 11-6 3. Appraisal Report Contents, continued c. Appraisal Report Contents, continued 4. Building Sketch • Gross living area calculations • Exterior dimensions of…

VA Lenders Handbook (Pamphlet 26-7) · VA-Lender-Handbook.pdf · Page 384 · View at official source (VA.gov — Appraisers/Staff Appraisal Reviewer) →

Appraisal Report 11-6 3. Appraisal Report Contents, continued c. Appraisal Report Contents, continued 4. Building Sketch • Gross living area calculations • Exterior dimensions of dwelling, basement, and any other improvements contributing value • Basement may be shown in relation to the floor plan of the house instead of separately • Floor plan layout (interior room dimensions and partitioning are not required) • If interior access is not provided on a liquidation appraisal, a sketch is not required 5. Photographs • Clear and labeled • Front and rear taken at opposite angles to show all sides of the dwelling if possible • Improvements with contributory value • Minimum Property Requirement (MPR) repair items • Street scene • Any views affecting value • Kitchen • Main living area • Bathrooms • Any recent updates, remodeling or renovation • Front view of each comparable sale (real estate marketing photographs are acceptable with an explanation, for example, to exhibit condition at the time of sale, or if a comparable sale is in a gated community that was not accessible to the appraiser) • For condominiums, if the subject and sales are in the same building or identical buildings, the appraiser may comment instead of providing photographs of the sales • Interior photographs are not required on liquidation appraisals when access to the interior of the property is not available 6. Repair list • Itemized list of any observed MPR repairs (see Chapter 12 of this handbook) or customer preference items to be installed on new construction appraisals • May be included directly on the appraisal form 7. Uniform Appraisal Dataset (UAD) • UAD Property Condition and Quality Rating Definitions • UAD Property Description Abbreviations (see Topic 13 of this chapter) Continued on next page

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