To PUD Or not to PUD That is the question...

[Jack Crabb]

The lender insists the subject development is a PUD. Based on my research and analyses, the development doesn't qualify as a PUD.

It may be that I'm missing something, but I feel like I've covered all the bases...

Per analysis of information obtained through the home owner, the MLS, & conversations with Realtors who have listings & sales within the subject development:
- There is no HOA
- Development dues are voluntary and cover maintenance & upkeep of the development entrance only


I've always gone by Fannie Mae's definition of a PUD:

"For a project to qualify as a PUD, all of the following requirements must be met:

• each unit owner’s membership in the HOA must be automatic and nonseverable,
• 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, and
• the subject unit must not be part of a condo or co-op project."

I called Fannie Mae for assistance, but no help... So, here I am.

Are there other definitions for PUD that I should consider? Are there exceptions to Fannie Mae's definition?

Any thoughts?

Thanks!

 

[Terrel L. Shields]

Send a copy to the lender and say you are not going to call it a PUD because it isn't.

 

[shrubberyvaluation]

Ask for documented proof of all 4 of those conditions being met to call it a PUD because your research is showing different.

 

[Jack Crabb]

"Send a copy to the lender and say you are not going to call it a PUD because it isn't."
- I have multiple times - they keep - coming back with the same request... I didn't mention this in my original post, but this tennis match has been going on for 2 months now. I'm tired of it... But, I need to know I'm right before I request the lender cease contact with me, because that's what it's going to take.

"Ask for documented proof of all 4 of those conditions being met to call it a PUD because your research is showing different."
- I have. They're referencing documents 10+ years old, which they've sent me twice now. Apparently, the development was originally intended to become a PUD, but it never did per FM's definition.

 

[shrubberyvaluation]

"Send a copy to the lender and say you are not going to call it a PUD because it isn't."
- I have multiple times - they keep - coming back with the same request... I didn't mention this in my original post, but this tennis match has been going on for 2 months now. I'm tired of it... But, I need to know I'm right before I request the lender cease contact with me, because that's what it's going to take.

"Ask for documented proof of all 4 of those conditions being met to call it a PUD because your research is showing different."
- I have. They're referencing documents 10+ years old, which they've sent me twice now. Apparently, the development was originally intended to become a PUD, but it never did per FM's definition.

Well not much more you can do.

 

[TerryRohrer]

I would simply say no each time they request it.

 

[glenn walker]

The lender insists the subject development is a PUD. Based on my research and analyses, the development doesn't qualify as a PUD.

It may be that I'm missing something, but I feel like I've covered all the bases...

Per analysis of information obtained through the home owner, the MLS, & conversations with Realtors who have listings & sales within the subject development:
- There is no HOA
- Development dues are voluntary and cover maintenance & upkeep of the development entrance only


I've always gone by Fannie Mae's definition of a PUD:

"For a project to qualify as a PUD, all of the following requirements must be met:

• each unit owner’s membership in the HOA must be automatic and nonseverable,
• 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, and
• the subject unit must not be part of a condo or co-op project."

I called Fannie Mae for assistance, but no help... So, here I am.

Are there other definitions for PUD that I should consider? Are there exceptions to Fannie Mae's definition?

Any thoughts?

Thanks!

The Lenders Title Report probably has whats called a PUD Rider attached to it which requires them to insure Title as a PUD. Many of these many years ago used to be called "deminimus" Puds meaning there were minimal common areas or services and some were voluntary but for Title Insurance and Fire insurance policy they are considered to be PUD- Ask Lender why they think its a PUD and if they can give you a copy of title report with PUD Rider . We have many older developments out here like you describe.

 

[glenn walker]

I would simply say no each time they request it.

No is not the correct answer as its called a Deminimus Pud -which emans there are no major common areas but limited ones that require Title Insurnace an Fire and homeowners insurance to call it a PUD. The Title REPORT will have whats called a PUD RIDER attached to it. That where the Underwriter is getting her direction on. Common in my area some may only have a entry gate or a pool that is voluntary but its still- insured as a PUD. Very simple ask Lenders UW why she believes it is a PUD . Loan will not be funded or title insured until box is checked.

 

[Fernando]

The lender insists the subject development is a PUD. Based on my research and analyses, the development doesn't qualify as a PUD.

It may be that I'm missing something, but I feel like I've covered all the bases...

Per analysis of information obtained through the home owner, the MLS, & conversations with Realtors who have listings & sales within the subject development:
- There is no HOA
- Development dues are voluntary and cover maintenance & upkeep of the development entrance only

What is this voluntary thing abou? Somebody has to pay for the upkeep of the development entrance only. Nothing's free in this world except for many government giveaways.
You better investigate this further.

I've always gone by Fannie Mae's definition of a PUD:

"For a project to qualify as a PUD, all of the following requirements must be met:

• each unit owner’s membership in the HOA must be automatic and nonseverable,
• 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, and
• the subject unit must not be part of a condo or co-op project."

I called Fannie Mae for assistance, but no help... So, here I am.

Are there other definitions for PUD that I should consider? Are there exceptions to Fannie Mae's definition?

Any thoughts?

Thanks!

 

[Jack Crabb]

No is not the correct answer as its called a Deminimus Pud -which emans there are no major common areas but limited ones that require Title Insurnace an Fire and homeowners insurance to call it a PUD. The Title REPORT will have whats called a PUD RIDER attached to it. That where the Underwriter is getting her direction on. Common in my area some may only have a entry gate or a pool that is voluntary but its still- insured as a PUD. Very simple ask Lenders UW why she believes it is a PUD . Loan will not be funded or title insured until box is checked.

They sent the title report, but the report didn't include a rider. I'll request that. Just to be sure - you're suggesting I ignore FNMA's definition of what qualifies as a PUD? It's what I've gone by all these years...

Thanks for the reply and the information.