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To Pud Or Not To Pud?

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ExplainDNA

Senior Member
Joined
Oct 30, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
Hi,

Many years ago my very favorite MAI instructor (Casey Hambleton, anyone know if he's still with us?) made the following comment in a course: "If there's a fee it's a PUD!" Of course I took that as gospel truth, I loved the guy, and he seemed pretty darn sure of himself. As time went by I heard others say likewise but...

...I also began to hear others challenge it. Some just said, "Heck no!"

Now, we all know some AMCs who tell us the "way it is", and other clients have their own interpretations and whatnot, but I'd like to know DEFINITELY, the actual, real deal, legal way to determine the PUD thing.

Is there a simple way, or is a tricky thing that may require investigation on occasion, or what? Man, KISS would be best, but it seems there's a lot of differing opinions out there.

Your input is coveted.

Best,

Dave...

P.S. - And yes, I'm asking today because it surfaced today. Borrower has a $42.00 per month HOA commitment, that's no small figure, but the client is insisting there's no PUD.
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
Mandatory fee....
And some common area
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Mandatory fee, it is a PUD. Voluntary, not. Zoning has nothing to do with a PUD. It can be zoned Planned Unit Development which simply means that specific housing types are specified, but without the fee, not a PUD per Fannie/Freddie.
 

Tim in NJ

Freshman Member
Joined
Feb 7, 2002
Professional Status
Certified Residential Appraiser
State
New Jersey
Lender has a title. Ask for it. May be not a PUD but ownership under "Covenant Agreement", which is basically the same thing,
 

ExplainDNA

Senior Member
Joined
Oct 30, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
I'm with you on the zoning. It was just that the monthly fee, it was large, and mandatory. That screams PUD to me.

Dave...
 

Amy Perkins

Senior Member
Joined
Jul 20, 2003
Professional Status
Certified Residential Appraiser
State
Tennessee
Hi,

Many years ago my very favorite MAI instructor (Casey Hambleton, anyone know if he's still with us?) made the following comment in a course: "If there's a fee it's a PUD!" Of course I took that as gospel truth, I loved the guy, and he seemed pretty darn sure of himself. As time went by I heard others say likewise but...

...I also began to hear others challenge it. Some just said, "Heck no!"

Now, we all know some AMCs who tell us the "way it is", and other clients have their own interpretations and whatnot, but I'd like to know DEFINITELY, the actual, real deal, legal way to determine the PUD thing.

Is there a simple way, or is a tricky thing that may require investigation on occasion, or what? Man, KISS would be best, but it seems there's a lot of differing opinions out there.

Your input is coveted.

Best,

Dave...

P.S. - And yes, I'm asking today because it surfaced today. Borrower has a $42.00 per month HOA commitment, that's no small figure, but the client is insisting there's no PUD.

It's a PUD if it has land ownership and no articles of incorporation. Get the title report, it's the only way to tell if there are the articles of incorporation.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Borrower has a $42.00 per month HOA commitment, that's no small figure, but the client is insisting there's no PUD.
I wish the very name be abolished. I do not agree that a monthly fee automatically makes it a PUD. We have an incorporated town that has a mandatory HOA fee. It runs the water company and provides access to golf courses and lakes that are otherwise restricted to "gentiles". Within that town/planned development/retirement village, etc. (some 22,000 acres and about the same in population) is found a number of true "PUD" with additional fees to take care of the lawns, parking lots, etc. and the ownership is basically the footprint of the building and nothing else.

But 9 of 10 problems with the PUD is created by the lender. And so if a HOA call it a PUD and then bury a statement within the report that it really isn't a PUD but is PUD lite and only there to pacify the underwriters.
 

TRESinc

Elite Member
Joined
Dec 1, 2011
Professional Status
Licensed Appraiser
State
Ohio
sadly casey passed away in 2006.

like a lot of the questions posed on here it depends. everyone so far has given some input so i will do the same. if completing a report that will eventually be for FNMA:

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.
 

ExplainDNA

Senior Member
Joined
Oct 30, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
2006?? Dang, that's how bad it gets. I would have told you I had spoken with him just a few years ago, had no idea. I met him in Ohio, thought the world of him, and sought him out elsewhere, the last being North Carolina, which I thought would have been well after 2006. Geez. Thanks for the update.

As for that definition, seems like our guy was a PUD, but the client, well, they for sure didn't see it that way, and we relented.

I'm with Terrell, get rid of the infernal thing.

Thanks,

Dave...
 
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