Section 322: Property and Liability Insurance (02/22/16) Section 322.01: General Insurance Requirements … Detached condos must meet general property/appraisal standards, insurance and priority lien requirements BUT … For best results, pose your search like a question. • excess of Fannie Mae’s priorityNew PUD project is one where the developer has ... association must meet the applicable requirements for condo projects. In addition, when a policy includes a coinsurance clause, but the coinsurance provision is not waived, the policy is still eligible if evidence acceptable to the servicer confirms the amount of coverage is at least equal to 100% of the insurable replacement cost of the project improvements. Extended Replacement Cost coverage, under which the insurer agrees to pay more than the property’s insurable replacement cost, is acceptable. FNMA loosen requirements for detached and 1-4 unit projects, as well as established projects A few years ago, Fannie Mae embarked upon a new method of categorizing project standards and requirements… If a policy includes a coinsurance clause, and includes an Agreed Amount Endorsement or selection of the Agreed Value Option that waives the requirement for coinsurance, the policy coverage will be considered acceptable evidence the 100% insurable replacement cost of the project improvements requirement has been met. The HOA or the co-op corporation must maintain a policy of property insurance with premiums being paid as a common expense. Freddie Mac and Fannie Mae eligibility requirements allow 3% down payment condo purchase conventional loans to borrowers who qualify on owner occupant condos. To meet our coverage requirements, obtain coverage, either through a … information from other Fannie Mae published sources. The following table provides additional requirements depending on the project type. Condo projects with over 25% commercial space, a master flood insurance policy with limited coverage, is not acceptable coverage. The policy must require the insurer to notify in writing the HOA (or insurance trustee) and each first lien mortgage loan holder named in the mortgagee clause at least 10 days before it cancels or substantially changes a condo project’s coverage. the policy is primary, even if a unit owner has other insurance covering the same loss. The policy must require the insurer to notify in writing the co-op corporation (or insurance trustee) and each first lien mortgage loan holder named in the mortgagee clause at least 30 days before it cancels or substantially changes coverage.  The property is either covered by the type of property and flood insurance coverage required for single-family detached dwellings, if the condo unit consists of the entire structure as well as the site and air … You can also download the printable ~800 page PDF, which include links. Events, Chapter B-2, Property Insurance Requirements, B-2-03, Property Insurance Requirements for Mortgage Loans Secured by a Unit in a PUD, Condo,or Co-op, Maximum Allowable Deductible Requirements, Named Insured and Mortgagee Clause Requirements, Acceptable Evidence of Master Insurance Policies, Notification Requirements for Policy Changes or Cancellation for Condo or Co-op Projects, B-2-02, Property Insurance Requirements for Mortgage Loans Secured by a One- to Four-Unit Property, How to do a hard refresh in Internet Explorer. • Fannie Mae Form 1073 • Freddie Mac Form 465 ‏Appraisals for detached condo units may be reported on Form 1004, provided information about HOA fees and property maintenance is included. Limited Review allowed with LP Accept Response and the following parameters Primary Resident ≤ 80% LTV/CLTV Second Homes ≤ 75% LTV/CLTV All other loans require a Full Review . 12. Down payment for Fannie Mae’s HomeStyle program is as low as 3% , but is usually 20% required if you choose to not have mortgage insurance. Verification of adequate hazard, flood (if applicable), liability and fidelity bond insurance is required … An insurance policy that includes either of the following endorsements will ensure full insurable value replacement cost coverage: a Guaranteed Replacement Cost Endorsement and, if the policy includes a coinsurance clause, an Agreed Value Option or Agreed Amount Endorsement; or. FANNIE MAE INSURANCE REQUIREMENTS The following is an excerpt from Part III: New Underwriting section of the Fannie Mae Multifamily Selling and Servicing Guide. At-A-Glance Fannie Mae Condo Project Review and Insurance Requirements This At-A-Glance is designed to help lenders determine the appropriate level of project review and insurance requirements for loan transactions in condo … The policy must either show the HOA or, if the condo’s legal documents permit it, an authorized representative of the HOA, including its insurance trustee, as the named insured. Additionally, the policy must provide that. • Unit owners are required, per the condo legal documents, to carry their own individual hazard and other applicable insurance coverage, which may include flood and liability insurance. endstream endobj startxref If you still have Technical Support questions, For example, a condominium estimated at … A Building Ordinance or Law Endorsement if the enforcement of any building, zoning, or land-use law will result in loss or damage, increased cost of repairs or reconstruction, or additional demolition and removal costs. FNMA has removed the requirement for a limited condo review for a detached condo project. Provide evidence of flood insurance coverage to Fannie Mae within 10 business days of the date of Fannie Mae’s request. The following requirements apply to PUDs, condos, and co-ops. Fannie Mae does not require a thorough project review for several types of projects or loan transactions, including: detached condo units; units in a two- to -four unit condo project; units in a PUD project; Fannie Mae to Fannie Mae … The following table provides the requirements regarding the name of the insured entity. The following requirements apply to PUDs, condos, and co-ops. feel free to email. h�bbd``b`�+��6 �b��� �zH�| �� ./H��2 �@� �� ��$���g a8dr(�P~2@HpG�X�@B�H�k&FF5�:Ɓ%�3�?0 � November 4, 2020. Mortgage Lender Sentiment Survey: Lenders Expect Stable Levels of Condo … Increase the coverage for home renovation or construction … 2- to 4-Unit Condominium … Loan-to-Value (LTV) Requirement The LTV required for a … The policy must protect against the perils customarily covered for similar projects, including those covered by the standard ”all risk” or ”special form coverage” endorsement or the ”broad form” covered causes of loss. A sample underwriting . We recommend that you use the latest version of FireFox or Chrome. On December 28, 2011, Fannie Mae issued new insurance requirements on the condos securing the mortgages it will purchase. Note: Fannie Mae will not require a Building Ordinance or Law Endorsement if it is not obtainable in the insurance market available to the association. But before purchasing, it is always best to get a number of quotes and compare rates. Extended Replacement Cost coverage, under which the insurer agrees to pay more than the property’s insurable replacement … In the event an HO-6 policy is required, the insurance policy must include the standard mortgagee clause. information from other Fannie Mae published sources. The unit may share no adjoining walls, … This gives you the best shot at getting a great condo insurance … The policy must cover all of the common elements belonging to the HOA, including fixtures, building service equipment, and common personal property and supplies. If you buy a $200,000 condo, then, you need at least $40,000 of insurance with a … Second home condos … Visit Selling and Servicing Guide Communications and Forms. Fannie Mae’s ineligible project section 4-2.1-03, and any additional conditions noted on the FHA condominium approval have been met. Insurance must cover 100% of the insurable replacement cost of project improvements, including the individual units for condo and co-op projects. See B-2-02, Property Insurance Requirements for Mortgage Loans Secured by a One- to Four-Unit Property for the required amount of coverage. Liability. an insurance policy maintained by the servicer which provides ”walls-in” as well as loss assessment coverage as needed in the event of an uninsured loss for all Fannie Mae PUD, condo, or co-op mortgage loans serviced by the servicer. Launch – (Fannie Mae … A Steam Boiler and Machinery/Equipment Breakdown Coverage Endorsement if the project has central heating or cooling. The maximum allowable deductible is as follows: For policies covering the common elements in a PUD project, a PUD unit mortgage loan, condo projects, or co-op projects, 5% of the face amount of the policy. If you have additional questions, Fannie Mae customers can visit Ask Poli to get A hard refresh will clear the browsers cache for a specific page and force the most recent If you have additional questions, Fannie Mae customers can visit Ask Poli to get You can purchase condo insurance from most major insurance companies and smaller companies as well. The ”loss payable” clause must show the HOA or the insurance trustee as a trustee for each unit owner and the holder of each unit’s mortgage loan. a Replacement Cost Endorsement and, if the policy includes a coinsurance clause, an Agreed Value Option or Agreed Amount Endorsement. For a comprehensive list of resources such as forms, announcements, lender letters, %%EOF If the master insurance policy maintained by an HOA for a condo project does not cover either the interior of the condo unit or the improvements made by the borrower to the interior of the condo unit, the servicer must ensure the condo unit has an HO-6 policy. Unit in a PUD project Project review is waived with the exception of some basic requirements. & Technology, News & The servicer must ensure on an annual basis that the master insurance coverage or any property insurance policies it maintains for a unit in a PUD, condo, or co-op project meets the requirements outlined in this Servicing Guide. Learn about our project insurance requirements through the condo project insurance training video series.. October 20, 2020. Lenders must still ensure compliance with all Fannie Mae requirements for property eligibility, appraisal standards, insurance… 0 Generally, mortgage lenders require individual condo unit insurance coverage to be at least 20 percent of the covered unit's appraised value. Fannie Mae has certain eligibility requirements … notices and more. Having Issues with Seeing this Page Correctly? Fannie Mae requires individual insurance policies for each mortgage loan it purchases or securitizes in a PUD project. FREDDIC MAC CONDOMINIUM PROJECT REQUIREMENTS . Except for 2- to- 4-Unit condominium projects, detached condominium units and Freddie Mac owned “no cash-out” refinance condominium unit mortgages delivered in accordance with the requirements in Guide Section 5701.7, the Seller must ensure that: - The condominium project is not a Condominium … The required special endorsements for PUD, condo, and co-op projects are as follows: An Inflation Guard Endorsement, when it can be obtained. h�b```f``:�����y�A��b�,+d�T����el�62�i5��T������]BW� �$9n���,]��ɢ�������L+Cif��i�@Z�e�&�2�4(T8q���`Ʋ���Fs���g\����;*�����9 �c*�'U%��b:��̸��8���@Z��q� ��� �H31��p ���w�@�1� �Z;� 407 0 obj <> endobj If an HO-6 policy is required, the insurance policy must provide coverage, as determined by the insurer, sufficient to repair the condo unit to at least its condition prior to a loss claim event. The servicer must also have in its possession a copy of any insurance policy covering the common areas of the PUD project. Appraisal-Condo … The minimum coverage allowed is 20% of the unit's appraised value, with a maximum five percent deductible. $1,000,000 Coverage minimum per any single occurrence (Not required for Detached … Here we give you a feel for the rules and discuss whether it's smart for your HOA to speak to an insurance broker to determine if your master insurance policy meets Fannie Mae's requirements. version of a page. the requirements of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Housing Administration, or the Veterans Administration.” 15. & Insights, Pricing & Insurance must cover 100% of the insurable replacement cost of project improvements, including the individual units for condo and co-op projects. Ask Poli features exclusive Q&As and more—plus official Selling & Servicing Guide content. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Escrow, Taxes, Assessments, and Insurance, Mortgage Loan Payment Processing, Remitting, Accounting, and Reporting, Default-Related Legal Services, Bankruptcy, Foreclosure Proceedings, and Acquired Properties, Servicing Guide Procedures, Exhibits, Quick Reference Materials, and Change Control Log, Research Conventional Condominium Guidelines VI. An endorsement or separate stand-alone boiler and machinery policy must provide for the insurer’s minimum liability per accident to at least equal the lesser of $2 million or the insurable value of the building(s) housing the boiler or machinery. Fannie Mae Loan Guidelines and Insurance Requirements for Condo Owners Explained. Fannie Mae will accept a master insurance policy in satisfaction of its insurance requirements for the units if the project’s legal documents allow for master insurance policies to cover both the individual units and the common elements. Requirements; Detached condo unit: A detached condo is defined as any condo unit that is completely detached from other condo units in the project. Detached condo unit transactions; 2- to 4-unit projects; No review – see Selling Guide for specifics about each waiver. In case of any conflict between this document and the Fannie Mae Selling Guide, the Selling Guidegoverns. 433 0 obj <>/Filter/FlateDecode/ID[<9E9B11BE835BC94A925411C57AC58C3D><76E66CCA807AC14C83AB1B0452FCB81B>]/Index[407 55]/Info 406 0 R/Length 116/Prev 122655/Root 408 0 R/Size 462/Type/XRef/W[1 2 1]>>stream Seller/Servicers are not required to determine the existence or adequacy of the project liability insurance and/or the fidelity or employee dishonesty insurance as required in Sections 8202.5 and 8202.6 for a Detached Condominium Unit reviewed under the Detached Condominium Projects review type. any Insurance Trust Agreement is recognized; the right of subrogation against unit owners is waived; the insurance is not prejudiced by any acts or omissions of individual unit owners not under the control of the HOA; and. INSURANCE REQUIREMENTS . The following table provides the requirements for notification of policy changes or cancellations. The HOA must obtain a Residential Condominium Building Association Policy (RCBAP) or equivalent private flood insurance coverage for the subject unit’sbuilding ifit is located in a SpecialFlood Hazard … The policy must show the HOA as the named insured. Fannie Mae prohibits project insurance policies that provide coverage for general and limited common elements of unaffiliated projects. • Manufactured homes (except when approved through the Fannie Mae Project Eligibility Service process) *Not applicable to 2- to 4-unit condominium projects, detached condominium units and Freddie Mac owned “no cash-out” refinance condominium unit mortgages delivered in accordance with the requirements … ... • Property insurance for a 1-unit detached dwelling •Flood insurance… When the servicer is named as the mortgagee, its name must be followed by the phrase ”its successors and assigns.”. For master insurance policies covering the individual units and the common elements, 5% of the replacement cost of the unit. Acceptable types of HOA master insurance policies include: The policy must cover all of the general and limited common elements that are normally included in coverage, including fixtures, building service equipment, and common personal property and supplies belonging to the HOA. Since the last changes for Fannie Mae’s lenders guidelines in 2011, insuring your condo has been playing a larger role than before for those seeking a mortgage.As of 2016, the latest guidelines from Fannie Mae (which are still intact) state that condo … The servicer must verify property insurance, including wind and flood insurance if applicable, coverage at the project level as part of its review of a project and ensure each condo association is covered by an individual policy. endstream endobj 408 0 obj <. Acceptable evidence of master insurance coverage for a unit in a PUD, condo, or co-op project includes either: a copy of the current master policy and any endorsements, and a certificate of insurance showing the individual unit securing the mortgage loan is covered under the policy; a blanket insurance policy which covers every project in which the servicer services Fannie Mae mortgage loans, with premiums borne by the servicer as a corporate expense; or. Underwriting Guidelines 2 of 19 01/14/2021 Return to Menu CONDOMINIUMS All condominium projects , for non-delegated and table funded transactions , must … 461 0 obj <>stream Ask Poli. FNMA has removed the requirement for a limited condo review for a detached condo project. The policy must cover the entire project, including the units. When financing a unit in a condominium project, the Fannie Mae accepted condominium projects list should be reviewed prior to submitting any project information to the Condominium Department. Detached condos must meet general property/appraisal standards, insurance and priority lien requirements BUT the limited review requirement … The policy must show the co-op corporation as the named insured. How to compare condo insurance rates. %PDF-1.5 %���� Both Fannie Mae and Freddie Mac Condominium Guidelines are similar. Though beyond the scope of this article, most projects will utilize HUD and Fannie Mae condominium … insurance policy meets the requirements for a single-family detached dwelling, OR Only the air space for the unit, and the improvements and site are considered to be N/A Yes No common areas or limited common areas, the project’s master hazard and flood insurance policy meets standard condo project insurance requirements… What's New. Fannie Mae-Freddie Mac Condo Guidelines And Requirements. SunTrust Mortgage, Inc. aligns with Fannie Mae regarding flood insurance requirements for attached condominium projects located in Special Flood Hazard Areas (SFHAs) and clarifies flood insurance guidance for attached and detached … Execution, Learning Center, Apps The endorsement must provide for contingent liability from the operation of building laws, demolition costs, and increased costs of reconstruction.