'pud'? Yes? Or No? Source Of Verification?

[YFA72]

This suggests that an appraiser should require a 'legal opinion' from an attorney or a Title Company before reporting the "PUD' status of the subject (and comps).
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'PUD' STATUS = UNDETERMINED
Home-owners in the subject development pay a mandatory, monthly HOA fee.
GSE requirements for a 'PUD'?
'Planned Unit Development' (PUD) definition:-

-A type of building development designed as a grouping of complementary land uses, such as housing, schools, recreation, retail, office, and industrial parks, contained within a single master development.
Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 5th ed. (Chicago: Appraisal Institute, 2010).planned unit development (PUD)

-FROM The NEW FHA Handbook 4000.1 (CAPS/BOLD ADDED)
-A planned unit development (PUD) refers to a residential development that contains, within the overall boundaries of the subdivision, COMMON AREAS OWNED BY A HOMEOWNERS' ASSOCIATION to which all homeowners must belong and to which they must pay lien-supported assessments.
-It is beyond the skills and qualifications of an appraiser to assemble and review ownership documentation in order to determine if homeowners have or have not got ownership/control over the facilities/HOA or any other relevant entity.
-Incorrectly reporting/implying that a subject is a PUD (i.e. where the residents own/control those amenities), when, in fact, it is not, could be viewed as an egregious error or, worse, a deliberate falsification.
-According to GSE requirements, if the facilities/common grounds/amenities are not owned/controlled by the homeowners, the subject does not qualify as a PUD and cannot be reported as such.
"Contrary to popular belief, the zoning district of the property is irrelevant.
"In the context of the secondary market definition, a "PUD" could exist in any zoning district.
"The only way to determine whether or not a property is a PUD is by reviewing the covenants and restrictions which will disclose mandatory membership in the homeowners association.
-Monthly or annual HOA fees may or may not be involved.
"Both Fannie Mae and Freddie Mac consider property to be a PUD if the development has all of the following characteristics:
1. The individual unit owners own or have a leasehold interest in a parcel of land improved with a dwelling. This ownership is not in common with other unit owners.
2. The development is administered by a homeowners’ association that owns or has a leasehold interest in and is obligated to maintain property and improvements within the development. (i.e. greenbelts, recreation facilities, and parking areas) for the common use and benefit of the unit owners.)
3. The unit owners have an automatic, non-severable interest in the homeowners association and pay mandatory dues or assessments.
4. Zoning itself is not a basis for classifying a project or subdivision as a PUD.
-An appraiser is not qualified to offer a 'legal opinion' regarding the 'legal rights' of the home-owners.

-It is assumed that all property-owners have the same benefits.
-But, as is typical of this style of community, the residents have an obligation to pay, but the 'benefits' they are to receive, are not specified.
-APPRAISER IS NOT QUALIFIED TO DETERMINE PUD STATUS SUBJECT OR OFFER A LEGAL OPINION.

 

[YFA72]

Here's more:-
UNDETERMINED PUD STATUS

FNMA WEBSITE shows the following text:-

PUD Project Definition
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.
For a project to qualify as a PUD for the purposes of this policy, all of the following requirements must be met:
-Each unit owner’s membership in the HOA must be automatic and non-severable,
- The payment of assessments related to the unit must be mandatory,
- Common property and improvements must be owned and maintained by an HOA for the benefit and use of the unit owners.
- The subject unit must not be part of a condo or co-op project.
- Zoning is not a basis for classifying a project or subdivision as a PUD.
- Units in projects or subdivisions simply zoned as PUDs that include the following characteristics are not defined as PUD projects under Fannie Mae’s policies.
- These projects have no common property and improvements, do not require the establishment of and membership in an HOA, and do not require the payment of assessments.
- Fannie Mae classifies PUD projects as either:-
- Type E — established PUD projects in which the developer has turned over voting control of the HOA to the unit purchasers.
- Type F — new PUD projects in which the developer has not turned over voting control of the HOA to the unit purchasers.
- PUD projects are not eligible for review using the PERS process, unless they contain single-wide manufactured housing, which does require a PERS submission.
- Eligibility Requirements for Units in PUD Projects:-
- Lenders must determine that the subject unit meets the following requirements ;-
? Eligibility Requirements –
For Units in PUD Projects
- The appraisal of the unit meets all appraisal requirements in Chapter B4-1, Appraisal Requirements. The individual unit securing the mortgage must be substantially complete. Any unfinished items must be in compliance with Fannie Mae’s policy for Postponed Improvements (see B4-1.2-03, Requirements for Postponed Improvements). The unit securing the mortgage satisfies all Fannie Mae's insurance requirements in Subpart B7, Insurance, including all provisions applicable to PUD projects. The PUD project must be in compliance with Fannie Mae’s policy for priority liens (see B4-2.1-02, Ineligible Projects).
Note: Any unit located in a condo or co-op project within a larger PUD project or master association must meet the applicable requirements for condo or co-op projects.

 

[Meandering]

Turn to the very front of that Dictionary and see that it's only for "educational" purposes.
No liability for definitions contained therein if you're not using it for educational purposes.

 

[Howard Klahr]

This suggests that an appraiser should require a 'legal opinion' from an attorney or a Title Company before reporting the "PUD' status of the subject (and comps).

Now that you have gone out and copied every possible document that you could identify to define a PUD, what is your question?

 

[Terrel L. Shields]

"The only way to determine whether or not a property is a PUD is by reviewing the covenants and restrictions which will disclose mandatory membership in the homeowners association.

Those are generally available in the HOA office, attached to deed or referencing a public document. I can do that, have done that, and see no problem ascertaining status

 

[glenn walker]

I would respond but I am going outside to hit-my head on the concrete a few times and then downing a bottle of Jack : ) LOL

 

[Riick]

I gave up worrying about such things.
If they pay monthly dues of $100 or more, or similar annual dues it's a PUD to the U/W.

 

[Zero]

Winner: Pointless Thread of the Day

 

[TRESinc]

i don't do FHA anymore so i can't comment on that. for FNMA it's pretty simple to make a determination.

- Each unit owner’s membership in the HOA must be automatic and non-severable,
- The payment of assessments related to the unit must be mandatory,
- Common property and improvements must be owned and maintained by an HOA for the benefit and use of the unit owners.
- The subject unit must not be part of a condo or co-op project.

are all those conditions met? if so then it is a PUD in FNMA's eyes and should be reported as such if using the 1004.

now take it to the next step - is the builder/developer in control of the PUD? if so then you must have one comp inside and one comp outside the PUD. the third is your choice.

that's pretty much all you need to know about a PUD to complete a 1004.

 

[Vermonter]

Honestly, I have many small "subdivisions" (2-10 homes) around here that either were PUDs and had a HOA/fees but no longer do, or initially intended to organize an HOA and never follow thru, or are in the process but there are currently no fees, etc. Most of the time the only common element is a shared road and the owners realize the HOA is unnecessary to accomplish maintenance. The majority of private shared roads don't even have formal maintenance agreements....a condition that tends to make an out of state UWs head explode.

Got one on my desk right now. Single road subdivision of 4 homes built in 92, initially had an HOA and fees, but dissolved in 95. Deeds and surveys corrected and now just a ROW for the road. No formal maintenance agreement. Owners plow and maintain it themselves.

It used to be no matter which way I called it, the client would say the opposite (fees or not, common elements or not). So now once I find out the property is possibly a PUD, I let the client know and have them confirm with the title attorney. It's not a PUD unless the evidence I have in public records is solid (which is rare) or the title attorney sends me docs saying it is.

And of course document everything.