Michigan - Site Condo in a PUD

[J Grant]

Below is the language which I just received from the underwriter:


To be clear, condominium is a form of ownership and PUD is a project or property type. The subject is a condominium as it is condominium ownership—see title work. While a condominium project or condominium unit may be within a larger (oftentimes mixed-use) PUD project, it is not a PUD.

Further, if this were an FHA appraisal, HUD requires that the appraisal be done on the 1073 condominium form on which there is no PUD box to check. Does that speak to you at all?

Do they want the appraisal done on the 1073 condominium form?


By checking the PUD box, you are creating a misleading report. If you do not want to change it, I will be submitting it to our QA department who may subsequently report/submit it to the State of Michigan as a misleading report. You will also be removed from the Rels’ panel of appraisers. I guess it boils down to how confident you are in your position.

What I am even more confused about is the fact that they understand the acceptability of completing an appraisal for a site condominium on the 1004 however do not understand the Fannie definition of a PUD and the fact that the subject meets the established criteria.

Why are you submitting a condo on a 1004 form? Why not communicate with the client, and resubmit the appraisal on a 1073 form?

Re, "site condos", re, not sure in this case what that term conveys. (a sf home style condo?) On the legal description of a property, it either says "condo", or "condominium", or "cond" somewhere on the description, or it does not.

If your subject legal description says "condo", and there is a condominium association, and condo docs, then it is a condo.

The subject condo sounds like it is located within a master planned (PUD) community. The condo may be a building , townhome, or single family home. The condo is the legal form of ownerhisp, no matter the architectural style, and the fact that is it physically located in a PUD does not change the legal form of ownership.

It sounds, from what I can gather, that the best way to do this assignment, if the subject is a legal condo, is to resubmit it on the condo form, and state in narrative that the subject condo is physically located within a master planned community, othwerwise known as a PUD.

 

[timd354]

Why are you submitting a condo on a 1004 form? Why not communicate with the client, and resubmit the appraisal on a 1073 form?

Re, "site condos", re, not sure in this case what that term conveys. (a sf home style condo?) .

The reason he is submitting a condo on a 1004 form is that it is perfectly appropriate to do so for a detached condo (called a site condo in many areas, especially Michigan) In fact, most site condo appraisals I have seen are reported on the 1004. For people not familiar with site condos, they are unusual in most places, but are very common in Michigan where they are commonly used because it is much easier and faster than the subdivision process for a piece of land to build new homes. In Michigan they are well accepted in the market and for most practical purposes function like any other detached, non-condo single family detached residences. Many site condo projects in Michigan consist of only a few homes, have no monthly condo fee, and have no active unit owners association as the individual owners are responsible for all insurance and maintenance of their homes and corresponding "lot" and have no additional common areas outside the defined site areas that are assigned to each house. In many cases the legal definition of each individual unit includes the actual land that would correspond to a typical lot for a non-condo detached house, so the "lot" is actually a part of the unit and not common area.

From Fannie's Guide
B4-1.2-06, Appraisal Forms and Report Exhibits (09/27/2011)

The following table lists Fannie Mae’s appraisal forms (see Single-Family Forms for a complete list):
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 .

 

[J Grant]

Thanks for an informative post , then he is okay reporting a site condo on the 1004 form , needs to uncheck the pud box, explain legal form of condo ownership , and that the subject condo is located inside a master planned pud community .

 

[Kim Whiting]

ahhhhhhh...........given it's a free standing manufactured home how would all the brilliant ones in here answer the project siding/roofing section? The form insists a condo is in a building attached to other units. that's your answer.

 

[Don Clark]

ahhhhhhh...........given it's a free standing manufactured home how would all the brilliant ones in here answer the project siding/roofing section? The form insists a condo is in a building attached to other units. that's your answer.

Where does it say that? I am looking at the form. It ask, under project information if they are detached. It also ask if the condominium was created by conversion of existing building(s) into a condominium.

There are many detached single family condo's in my market. They are growing in popularity. Some have no fees and no common areas. We also have many that are 2 units. That is the entire condo is just 2 units. I believe the most appropriate form for a condo is the condo form. The MH Condo development we have here locally I have done many on the condo form. Every double wide is a condo unit.

 

[mark lyons]

I have this definition of a PUD by FNMA hanging on the wall in my office.



The definition for PUD as described by FNMA is:


1. There is common property for the units
2. There is an automatic and non-severable membership in the home owner's Association
3. There are mandatory dues
4. And the property is NOT a condominium unit.


.

Do you have an original source/location for this? I searched but couldn't find anything?

I like to be able to quote the original when arguing with UWs rather than saying i saw it in an internet forum. Thanks

 

[Don Clark]

Do you have an original source/location for this? I searched but couldn't find anything?

I like to be able to quote the original when arguing with UWs rather than saying i saw it in an internet forum. Thanks[/quote

https://www.efanniemae.com/sf/guides/ssg/sg/pdf/sel051512.pdf

 

[Kim Whiting]

Your an Instructor? Lord have Mercy.
Project information..............hmmm.......how many stories and elevators? This really applies to free standing Manufactured homes doesn't it....
Project site......................hmmmm........sites are owned by each manufactured home owner.....there is no project site!!!!
Teach on friend.

 

[Pittsburgh Pete]

Someone needs to get out more and shake off the form-filling mentality. Believe it or not, some of them there checkboxes aren't applicable in some instances. Go figure!

 

[Kim Whiting]

and because they're not filled out they come back from the client.......and what world do you live in?