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Site Condo

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Metalfan

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Feb 2, 2018
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Banking/Mortgage Industry
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North Carolina
Hello, can a site condo also be in a PUD, this underwriter says no. Fannie says that to be in a PUD the subject cannot be part of a condo or co-op project however that goes against the very definition of PUD. In CA.
 
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TRESinc

Elite Member
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Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
Hello, can a site condo also be in a PUD, this underwriter says no. Fannie says that to be in a PUD the subject cannot be part of a condo or co-op project however that goes against the very definition of PUD. In CA.

like most things in life... it depends. the FNMA definition of a PUD is not necessarily the same thing as someone else's definition. people often confuse zoning on this issue as well. if you are going for a conventional loan this is the definition that will most likely be applied:

Fannie Mae defines a PUD as follows:

Planned Unit Development (PUD) – General Definition.A real estate project in which each unit owner has title to a residential lot and building and a nonexclusive easement on the common areas of the project (for example, a clubhouse, pool, playground, entrance/exit, etc). The owner may also have an exclusive easement over some parts of the common areas (for example, a parking space). (See, FNMA Seller/Servicer Guide, Chapter 3, Glossary).

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:

There is common property for the project; and
Each unit owner’s membership interest in the homeowner’s association must be automatic and non-severable; and
The payment of assessments related to the units must be mandatory; and
The project must not be a Condominium.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Fannie 2018

https://www.fanniemae.com/content/guide/selling/b4/2.2/05.html

A detached condo unit may be in a project consisting solely of detached units or in a development containing a mixture of attached and detached units. Site condos in which the unit owner owns the detached condo unit and the land upon which the unit is built are a type of detached condo.

Detached Condo Projects Currently our policy allows for all detached condo units (other than site condos, which do not require project review) to be reviewed under the Limited Review process. Additionally, the Guide does not allow construction-to-permanent financing for detached condos.

With this update we are:  waiving project review requirements for all detached condo units;  removing references to site condos so that all detached condos will be treated the same;  specifically reminding lenders that all detached units must meet property standards, appraisal standards, insurance, and priority lien requirements;
 

Metalfan

Freshman Member
Joined
Feb 2, 2018
Professional Status
Banking/Mortgage Industry
State
North Carolina
Thank you guys very much!
 
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