|
As the IMA prepares for the year ahead, the industry continues to navigate rising operational costs and significant regulatory changes. Below are key developments and issues Iowa’s mortgage professionals are monitoring as they prepare for the spring purchase market.
Critical Issues to Watch
Credit bureau report cost increases — Lenders are facing a fourth consecutive year of rising credit reporting costs. This year, many originators are seeing total tri-merge report costs increase an estimated 43% to 50% compared with 2025 levels.
Fair Isaac Corporation (FICO) shifted to a new performance-based model and direct licensing framework. While the shift was intended to provide more flexibility, the combination of new credit bureau fees and technical assessments is driving higher costs for many resellers.
In response to the rising costs, some bureaus, including Equifax and TransUnion, are offering VantageScore 4.0 at a significant discount compared to FICO pricing this year. However, VantageScore 4.0 has not yet been approved as an alternative by the Federal Housing Finance Agency (FHFA) or the government-sponsored enterprises.
Appraisal reform and UAD 3.6 — The industry is entering the final transition phase of the most significant appraisal modernization in over a decade. Fannie Mae and Freddie Mac are replacing legacy appraisal forms with a single, data-centric digital appraisal report under the Uniform Appraisal Dataset (UAD) 3.6, aligned with the Mortgage Industry Standards Maintenance Organization 3.6 standard.
The limited production period is ending, and as of Jan. 26, lenders may begin submitting UAD 3.6 appraisals. Use of the new format becomes mandatory on Nov. 2, 2026. The Federal Housing Administration is expected to begin its transition to UAD 3.6 this spring, aligning with the peak homebuying season.
Preparation will require more than managing appraisal-related questions. Lenders will need to ensure back office systems are ready for the shift to a more detailed data model. Under UAD 3.6, appraisers will capture more room-level data, condition metrics, and energy-efficiency features. As a result, lenders may need to update loan origination systems (LOS) to handle the increased data volume.
Iowa Legislature in session — The Iowa Legislature is back in session, and lawmakers are reviewing several proposals. Property tax reform is a key focus this year, with the governor, House and Senate advancing different proposals on reforms. Decisions made during the session will impact local city and county budgets and could have impacts on funding for housing programs. This is an area to monitor closely.
Preparing for the Iowa Spring Purchase Market
While the national housing market remains tight, Iowa enters the spring season with a clear affordability advantage.
Mortgage rates have stabilized in the 5.75% to 6.25% range. While still elevated, this has established a new normal for Iowa buyers. Inventory remains limited but has shown modest improvement in some suburban areas.
Regional markets such as Council Bluffs and Cedar Rapids continue to see strong demand from first-time homebuyers. Iowa currently ranks as the eighth-most affordable state for homeownership, based on mortgage costs relative to income.
Buyers are also showing increased interest in adjustable-rate mortgages, interest rate buydowns, and community-based programs as they look for ways to manage monthly payments. At the federal level, proposals aimed at improving housing affordability continue to emerge from Washington. We will continue advocacy efforts through our partners at the Mortgage Bankers Association as policy discussions develop.
We look forward to the IMA Spring Conference on March 24–25. More conference information is included below.
| 
