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  #1  
Old 11-12-2008, 04:37 PM
hglenbetts's Avatar
hglenbetts hglenbetts is offline
 
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Default Site Condo issue

This will be one of those threads where most of you, because of "local" custom, will be on the wrong track.

IN MICHIGAN, we have a land division system called Site Condo. Sort of like a subdivision with by-laws.

For those of you who are familiar with this, you are most likely aware that we now have to do a SFR site condo in a condo form 1073, which is really a poor fit.

I was just told, that through a glitch in HUD, that Site Condos now have to be listed on the HUD approved Condominium list. This particular site condo is rather new, if that may be a factor.

Has anyone else had this problem??

Any thoughts??
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Last edited by hglenbetts : 11-12-2008 at 05:23 PM.
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  #2  
Old 11-12-2008, 08:06 PM
Mike Siegfried Mike Siegfried is offline
 
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We have quite a few site condos here in LA and I have done a bunch of them. I haven't run into the issue of HUD approval yet. I have always used the Condo form which has not been a problem since we have (had) plenty of Site Condo comps. However, there is one lender who insists that a separate cost approach be included. I explained numerous times the problem of common area and the problem it presents in a cost approach, but I couldn't convince them.

Mike
  #3  
Old 11-12-2008, 09:46 PM
Doug Wegener Doug Wegener is online now
 
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Default Site condo

Quote:
Originally Posted by hglenbetts View Post
This will be one of those threads where most of you, because of "local" custom, will be on the wrong track.

IN MICHIGAN, we have a land division system called Site Condo. Sort of like a subdivision with by-laws.

For those of you who are familiar with this, you are most likely aware that we now have to do a SFR site condo in a condo form 1073, which is really a poor fit.

I was just told, that through a glitch in HUD, that Site Condos now have to be listed on the HUD approved Condominium list. This particular site condo is rather new, if that may be a factor.

Has anyone else had this problem??

Any thoughts??
I did one about a month ago which was not on the HUD approved Condominum list. I believe
they got spot approval.

Really though its not your problem. If the lender orders it , do it. If its not approved thats their problem.
  #4  
Old 11-13-2008, 07:36 AM
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Don Clark Don Clark is online now
 
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I have done many, many of these, all on the 1073 condo form with no problems. Never been asked, nor would I try to provide a cost approach on a condo. We also have 2 unit condos where the entire condo is just 2 units. We also have several 4 unit condos, where the entire condo is just 4 units. All on a 1073 form. We also have at least one condo that is a mix of attached condos in an apartment building like structure, and 6 detached or site condos, all in the same complex.

Just keep in mind...."A condo is a form of ownership, not an archetectural style". Now, that is about the 2,500th time I have said that on this forum. Also, we have some site condo complex's that do not have condo fees or an association. Also, a 1950's style motel that has been converted to a condo.
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  #5  
Old 11-13-2008, 08:36 AM
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hglenbetts hglenbetts is offline
 
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Thanks, all for your input, but it appears some of you are unfamiliar with what a SITE CONDO is. Here in Michigan, and as I understand it, a few other States, Developers are able to utilize the condominium act to create "Subdivisions" with individual "Lots" (Units). These units are privately owned, and for the most part function exactly like a standard subdivision lot. The owner improves his "unit" with a Single family residence that sits within the set backs of his lot. They own their house, there lot and the other improvements that have been made on the lot.

Common elements come into play with, possibly, the streets, a neighborhood park, walking trails, neighborhood entrances. Some times, non of these things are involved.

So, what we have is a house on a lot (the unit), there is site value, there is value in the site improvements attributed to the home owner, and typically, the HOA and it's holding (any Common elements) has only a minor impact on value.

Maybe a moderator could move this into the Michigan Forum.

Thanks
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  #6  
Old 11-17-2008, 11:42 AM
Mike Boyd Mike Boyd is offline
 
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Default

Quote:
Originally Posted by Mike Siegfried View Post
We have quite a few site condos here in LA and I have done a bunch of them. I haven't run into the issue of HUD approval yet. I have always used the Condo form which has not been a problem since we have (had) plenty of Site Condo comps. However, there is one lender who insists that a separate cost approach be included. I explained numerous times the problem of common area and the problem it presents in a cost approach, but I couldn't convince them.

Mike
What is your definition of a "site condo?"
  #7  
Old 11-17-2008, 03:29 PM
Mike Siegfried Mike Siegfried is offline
 
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Quote:
Originally Posted by Mike Boyd View Post
What is your definition of a "site condo?"
The site condos I am familiar with are mostly just like hglenbetts described. The condo "unit" is actually the individual parcel, upon which is a detached SFR. Most are in gated developments and easily mistaken for PUDs until you check the land use and plat map. They are almost always on private streets and often have a pool or community center. There are also areas in LA where we have rather large detached homes on large lots which are curiously also condos. The ones I'm thinking of are in Beverly Glen and you would not know that they are not SFRs to look at them. I have seen several purchases blow out on these when the buyer finds out he is buying a "condo" instead of an SFR. We also have alot of the "2 homes on a lot" condos in the beach areas, but these are actually not site condos, just 2 unit "projects". BTW, Thanks Don. I have always maintained that you can't do a cost approach with common land involved and the lenders call me crazy. I think they just wanted a cost approach for insurance purposes anyway.

Mike
  #8  
Old 11-18-2008, 08:10 AM
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Mike Garrett, RAA Mike Garrett, RAA is online now
 
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Default

See Don's post....common here to, similiar to a PUD.
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  #9  
Old 11-18-2008, 02:29 PM
Bama Bayou Bama Bayou is offline
 
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Default

Common here too, I live in one almost exactly as the OP described. Buy a house in my development and you get a condo deed. You also have ownership of the lot on which your house is situated. Several vacant lots are for sale. This is one of the few situations where a cost approach may be applicable in a condo.
  #10  
Old 11-19-2008, 12:04 PM
Mike Boyd Mike Boyd is offline
 
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Default

Quote:
Originally Posted by Mike Siegfried View Post
The site condos I am familiar with are mostly just like hglenbetts described. The condo "unit" is actually the individual parcel, upon which is a detached SFR. Most are in gated developments and easily mistaken for PUDs until you check the land use and plat map. They are almost always on private streets and often have a pool or community center. There are also areas in LA where we have rather large detached homes on large lots which are curiously also condos. The ones I'm thinking of are in Beverly Glen and you would not know that they are not SFRs to look at them. I have seen several purchases blow out on these when the buyer finds out he is buying a "condo" instead of an SFR. We also have alot of the "2 homes on a lot" condos in the beach areas, but these are actually not site condos, just 2 unit "projects". BTW, Thanks Don. I have always maintained that you can't do a cost approach with common land involved and the lenders call me crazy. I think they just wanted a cost approach for insurance purposes anyway.

Mike
In my opinion and experience, if you do not have fee ownership of the land your house sits on, it is a condo. Otherwise, if you own the land and it is attached to another unit it is an attached SFR. If detached from any other unit it is a detached SFR within a Planned Unit Development.(PUD) The project must be approved by FHA either way.
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