Definition Of Pud

[Vegan702]

I don't have my real estate dictionary handy, but have located several sites online that define a "PUD" as "a project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners."

From this I can assume that an area that has CC&R's recorded, but no HOA, that it is not a PUD?

 

[Billy Johnson]

pud

Clusters of homes or smaller then average sites, that are owned fee simple. Also partial ownership of park or large common areas within the development.

 

[Anthem]

Planned Unit Development

 

[Anthem]

Clusters of homes or smaller then average sites, that are owned fee simple. Also partial ownership of park or large common areas within the development.

Some PUDS have Large lots

 

[Tejus]

When filling out a Fannie Mae Appraisal Form, anything with a mandatory HOA fee is considered a PUD.

When rewriting the forms, Fannie Mae should have removed "PUD" and left HOA since that is what they are asking for. Their PUD definition is inconsistent with the rest of the world.

This is one of those cases where it's been done incorrectly for so long most people are used to it and it's simpler to continue doing it wrong.

bueno suerto.

 

[Mike Garrett RAA]

Agreed!

 

[xm72mhd]

Originally posted by Alan Gertner@Dec 5 2005, 10:43 PM
When filling out a Fannie Mae Appraisal Form, anything with a mandatory HOA fee is considered a PUD.

Alan and Mike are correct.

Another example of the appraisal industry being forced to depart from the common and established meaning of words and terminology due to some kind of a Fannie Mae synapse. No body, I do mean nobody, else defines a PUD the way Fannie does. It blew my mind when I learned it on here. I decided then and there that I couldn't make sense of what Fannie does. I was right, take a look at the problems and questions the new forms have created. The forms are a solution to what problem? They now are the problem, just like PUD

You just have to remember it. You won't be able to locate a readily available source to define these Fannie things.

 

[Marcia Langley]

Edd,

I agree that Fannie's use of the term 'PUD' is just plain weird. But they are not the only ones. FHA and Freddie each have a published deffinition, too. They are all similar but not exactly the same and none of them are like the real deffinition of the term.

It would make much more sense to me if they simply asked two yes or no questions:

"Are there commonly owned elements?" If yes describe.

"Are there mandatory financial obligations?" If yes, describe.

Even local zoning and recorder offices have coopted the term 'PUD' and made up their own definition for it.

We have one in a small town near here where the developer got his subdivision designated as a PUD by the town so he could plat lots (all SFR) smaller than would otherwise be allowed in exchange for some little pockets of green space.

He still owns the green space but has disbanded his company and moved out of state. An HOA was never established and the homeowners refuse to form one.

The city refuses to take over ownership of the abandoned green space, so it doesn't get mowed. The town got burned once and have been very careful, since.

I still check the PUD box when I work in this subdivision, even though the indiviual homeowners don't own anything in common. I am convinced that the real use of the PUD box is simply a signal to underwriters that it might be in their best interest to at least read the details of the neighborhood/site sections/comments.

 

[Rich Heyn]

When filling out a Fannie Mae Appraisal Form, anything with a mandatory HOA fee is considered a PUD.

Actually, that's not quite correct, at least not if the development has been done under a condo act. Many areas have "site condos," "open-air condos," "horizontal condos," or whatever you want to call them. Detached single-unit dwellings on sites owned fee-simple but the land was developed under a condo act. These often look and feel like a PUD and may be zoned as such, but Fannie does not consider them to be PUD's

From the AI seminar "Professional's Guide to the Uniform Residential Appraisal Report" © Richard Heyn, 2005.

The appraiser is to report if the property is part of a planned unit development. Terminology is an important issue here, since local zoning ordinances may or may not use the same definitions, as do the GSEs. The key elements here are:

 Common property

 An automatic, nonseverable membership in an owner’s association

 Mandatory dues

 Not a condo development

Here is what Fannie Mae says about PUDs in the Selling Guide:
A planned unit development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by an owners' association for the benefit and use of the individual units within the project. For a project to qualify as a PUD, the owners' association must require automatic, nonseverable membership for each individual unit owner, and provide for mandatory assessments. Zoning should not be the basis for classifying a project as a PUD.
Appraisals for PUD units that secure manually underwritten mortgages are generally documented on the Uniform Residential Appraisal Report (Form 1004) or the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055). To assure that all the specific eligibility criteria for a new PUD project are adequately addressed, it may be necessary to use an addendum to Form 1004 to provide information for appraisals related to attached units in new PUD projects (particularly when the developer is still in control of the owners' association). Desktop Underwriter will specify the level of property analysis and review for Desktop Underwriter-processed mortgages that are secured by PUD units.
The appraisal of an individual unit in a PUD requires the appraiser to analyze the PUD project as well as the individual unit. The appraiser must pay special attention to the location of the individual unit within the project, the project's amenities, and the amount and purpose of the owners' association assessment since the marketability and value of the individual units in a project generally depend on the marketability and appeal of the project itself.

 

[Mike Garrett RAA]

Thanks Rich...

We have lots of neighborhoods with HOAs but no common elements. Since there is mandatory dues we report it as a PUD. Is that incorrect?