• Welcome to AppraisersForum.com, the premier online community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Fannie Definition of a PUD

Status
Not open for further replies.
D

David Durham

Sophomore Member
Joined
May 1, 2002
Professional Status
Certified Residential Appraiser
State
Michigan
The following PUD definition is all over the web (and this site):

2. Planned Unit Development (PUD) – Specific Requirements for Classification as a PUD.(See, FNMA Seller/Servicer Guide, Chapter 2, Section B4-2.3-01) A Planned Unit Development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by a homeowner’s association for the benefit and use of the individual PUD units. In order for a project to qualify as a PUD, the following elements must be met:
a. There is common property for the project; and
b. Each unit owner’s membership interest in the homeowner’s association must be automatic and non-severable; and
c. The payment of assessments related to the units must be mandatory; and
d. The project must not be a Condominium.

I can not find anything directly from Fannie where they state part d (The project must not be a Condominium). Does anyone know where I could find this statement coming directly from Fannie? I've searched all over their site and selling guide.
 
The difference is that a PUD is not a Condomunium. A Condominium ownership includes all improvements so that what you own is the airspace within the unit. A PUD is either attached or detached, on an owned site, wherein the property owner owns the site and improvements but there exists common ownership of the common areas and amenities, a Homeowners Association exists, and there is a mandatory HOA fee.

That is why a PUD is not a Condominium in that with a condominium there is no individual ownership of the improvements and site per se. Don't have the cite readily available but that is the nuts and bolts of the differential.

A home in a PUD is completed on a 1004/2055 because you have individual units and sites. A Condominium unit is completed on the Condo form because there is not an individual site with improvements. Rather you are describing the overall project and the individually owned space within the project.
 
Peter, I can't find it anywhere in there. I took a good look before I posted the question.
 
A PUD can consist of detached, semi-detached SFR dwellings with lot ownership or a mix of those plus Condominiums OR both. Get a copy of the prospectus from the HOA or Local RE agents who sell most of the properties in the subject property's development. and review the subject's deed.

"Form Purpose
Uniform Residential
Appraisal Report (Form
1004)
For appraisals of one-unit properties and units in PUDs (including those
that have an illegal second unit or accessory apartment) based on interior
and exterior property inspections. Form 1004 also may be used for two unit
properties, if each of the units is occupied by one of the co-borrowers
as his or her principal residence or if the value of the legal second unit
is relatively insignificant in relation to the total value of the property (as
might be the case for a basement unit or a unit over a garage).

In addition, appraisals for units in condo projects that consist solely of detached dwellings may be documented on Form 1004, if the appraiser includes an adequate description of the project and information about the homeowners’ association fees and the quality of the project maintenance.

Appraisals reported on Form 1004 must be completed in accordance with the UAD Specification
Printed copies may not be the most current version. For the most current version, go to the online version at
https://www.fanniemae.com/singlefamily/originating-underwriting. 559

also see Pg 636 B4-2.2-01, Condo Project Eligibility (06/28/2011) and

"B4-2.3-01, PUD: Lender Full Review Requirements (06/28/2011)
Introduction
This topic contains information on eligibility requirements for PUD projects.
Eligibility Requirements for PUD Projects
A PUD is a project or subdivision that consists of common property and improvements that are owned and maintained by an HOA for the benefit and use of the individual PUD units.
In order for a project to qualify as a PUD, each unit owner’s membership in the HOA must be automatic and nonseverable, and the payment of assessments related to the unit must be mandatory.
Zoning is not a basis for classifying a project or subdivision as a PUD."
 
Last edited:
I find it strange that the definition I quoted is cited everywhere as coming from Fannie, however, I can not find a statement from them that says one of the requirements is "the project must not be a condominium."

I wonder if Fannie has revised / removed it.
 
What about site condos where they own the land and have mandatory HOW dues .....If I do it on 1004 they require I check the pud box. ...so I typically do on condo gorm...but some refuse the condo form and then scream when PUD box is checked....but if you leave it unchecked...underwriting stops to check it.....
 
The difference is that a PUD is not a Condomunium. A Condominium ownership includes all improvements so that what you own is the airspace within the unit. A PUD is either attached or detached, on an owned site, wherein the property owner owns the site and improvements but there exists common ownership of the common areas and amenities, a Homeowners Association exists, and there is a mandatory HOA fee.
Click to expand...

Boom. Copy, paste, insert. Perfect answer.
 
I guess you must not have site condos in your area. A site condo is a single family home that could be on 50 acres of land and the home owner owns the land, is responsible for maintaining the land and exterior of the property just like any single family home. The road is typically private, but not always, and the HOA covers payment for the snow plowing, and future road maintenance and landscaping of the sign....if there even is one. Typically the only common area is the road.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com
Back
Top