Condominium Approval Instructions

Transcription

1 Condominium Approval Instructions Fannie Mae Lender Limited Review for Established Condominium Projects Fannie Mae CPM-Expedited Review for Established and New Condominium Projects Fannie Mae Lender Full Review for Established Condominium Projects FHA HRAP Approvals for Existing Projects, Projects < Less Than 12 Months, and Projects Under Construction 1. Review DU findings to confirm the condominium project meets AFR eligibility guidelines. 2. Mark the property type on the AFR submission sheet as condominium. 3. Register the loan in DataTrac Web. 4. Upload the loan documents along with the AFR Submission sheet to New Loan Submission. 5. Send the applicable Condominium Review Questionnaire form to the HOA to be completed and executed. Along with the questionnaire the HOA must provide all of the following: For Fannie Mae Lender Limited Review: a. A fully completed Fannie Mae Limited Lender Review Questionnaire; b. HOA/Management Company Invoice for filling out questionnaire and providing the required documentation; c. The Master/Blanket Insurance Policy that includes Hazard and Liability; d. Fidelity Bond/Insurance (only required if the project has more than 20 units); e. A Certificate of Insurance showing that the individual unit that secures the mortgage loan is covered under the Master/Blanket Policy; f. Flood Insurance declaration page, if applicable; and g. Litigation Letter, if applicable. h. Note: If the HOA uses a management company, the Fidelity Insurance Policy of the management company must also be provided. i. Note: If an environmental problem is identified, an Environmental Phase I Assessment will be required.

2 For Fannie Mae CPM Expedited Review for Established Projects: a. A fully completed Fannie Mae CPM Expedited Condominium Review Questionnaire for Established Projects; b. b-i from the Fannie Mae Lender Limited Review checklist; and c. Actual HOA Budget (except for 2-4 unit projects). The Budget must: Be adequate and include allocations for line items pertinent to the type of condo; Provide for the funding of replacement reserves for capital expenditures and deferred maintenance (of at least 10% of budget); and Provide adequate funding for insurance deductible amounts. For Fannie Mae CPM Expedited Review for New Projects: a. A fully completed Fannie Mae CPM Expedited Condominium Questionnaire for New Projects; b. b-i from the Fannie Mae Lender Limited Review checklist; c. Actual HOA Budget (except for 2-4 unit projects); The Budget must: Be adequate and include allocations for line items pertinent to the type of condo; Provide for the funding of replacement reserves for capital expenditures and deferred maintenance (of at least 10% of budget); and Provide adequate funding for insurance deductible amounts. d. A letter from HOA attorney representing that the condominium project has been created and exists in full compliance with State law requirements of the jurisdiction in which the project is located and all other applicable laws and regulations; e. Projected Operating Budget (except 2-4 unit project); f. Recorded Legal Documents, including the Master Deed/Covenants, Conditions, and Restrictions (CC&Rs)/Declarations and any amendments; g. Signed and Adopted By-Laws and any amendments; h. Articles of Incorporation, Articles of Association filed with the State and any amendments (if State does not require incorporation, provide copy of applicable State statute); i. Leasehold Agreement, if applicable; and j. Completion Bond, if applicable. For Fannie Mae Lender Full Review for Established Projects a. A fully completed Fannie Mae CPM Expedited Condominium Review Questionnaire for Established Projects; b. b-i from the Fannie Mae Lender Limited Review checklist; and c. Actual HOA Budget (except for 2-4 unit projects). The Budget must: Be adequate and include allocations for line items pertinent to the type of condo; Provide for the funding of replacement reserves for capital expenditures and deferred maintenance (of at least 10% of budget); and

3 Provide adequate funding for insurance deductible amounts. For FHA HRAP Approvals for Existing Projects, Projects Existing < Less Than 12 Months, and Projects Under Construction: a. A fully completed FHA Condominium HRAP Project Approval Questionnaire; b. Condominium Legal Documents and all amendments thereto: Recorded condo plat map indicating legal description; Covenants, Conditions and Restrictions (CC&Rs) / Recorded Declarations /Recorded Master Deed; Signed and adopted by-laws (if State law does not require signed by-laws, provide copy of applicable State statute; Articles of Incorporation, Articles of Association or Condominium Trust filed with the State (if State does not require incorporation, provide copy of applicable State statute); Recorded condominium site plans; and Plan or evidence of Transfer of Control of Homeowners Association to unit owners. c. Financial Documents Current year s actual budget; Previous year s actual year-end results (Balance Sheet/Income &Expense Statements); Current balance sheet to support adequacy of budget (current balance sheet to be dated within the last 90 days); HOA Delinquency Report (within 30 days); If a project is under construction and is built in legally declared phases, an actual year to date budget is required; For projects under construction, the current year s projected budget; and Bank Statements may be required. Note: In cases where the budget documents do not meet the financial review standards, a Reserve Study will be requested to assess the financial stability of the project. The reserve study cannot be more than 24 months old. d. Signed Management Agreement (if applicable) In lieu of an executed Agreement, an executed (signed and dated) document defining the terms and services provided by the management company on behalf of the homeowners association (HOA) may be provided. Note: If the homeowners association (HOA) is self-managed, a letter on the homeowners association s letterhead indicating that fact is required. e. FEMA Flood Map (must be an official FEMA Flood Map and must identify the location of the project on FEMA Flood Map) A. LOMA (a final Letter of Map Amendment); or B. LOMR (a final Letter of Map Revision). Note: A flood certification is acceptable to augment the FEMA Flood Map but cannot replace it. f. Evidence of Required Insurance Coverage (minimum coverage must comply with HUD Standards)

4 Hazard Insurance Policy - Master Policy; Liability Insurance Policy; Master Flood Insurance Policy (as applicable); Entire Fidelity Bond Insurance Policy- For projects with more than 20 units; and Management Company Fidelity Insurance Policy-If the homeowners association has a management company under contract, then the management company must also obtain and maintain Fidelity Insurance coverage. (For projects with more than 20 units). This does not replace the homeowners association s required coverage. Note: Please make sure that the current declaration pages for all policies are provided and each policy names the HOA as the insured. g. Pending Litigation A written, signed and dated explanation regarding pending litigation must be provided by the attorney representing the homeowners association/builder/ developer/or management company which addresses each of the following items: Reason for the litigation; What is the anticipated settlement/judgment date; If applicable, is there sufficient insurance coverage to pay out a settlement/judgment without affecting the financial stability of the project; Could the legal action impact the solvency of the HOA (if so, how); Could the ability of homeowners to transfer title be affected (if so, how); and Could the action impact the homeowners rights. h. Special Assessments A written, signed and dated explanation regarding any assessments must be provided by the homeowners association/builder/developer/or management company which answers the following items: Purpose of assessment; Does the assessment affect the marketability of any of the units have other special assessments been required; When is the assessment to be paid; How is the overall financial stability of the project impacted by the assessment; and What impact will the assessment have on the future value and marketability of the property? i. Projects that have been involved in Bankruptcy/Receivership/Foreclosure/or given a Deed in Lieu of Foreclosure must provide documents evidencing completion of the legal action. j. Projects that have been involved in an Asset Sale must provide documentation evidencing completion of sale and a Reserve Study (no more than 24 months old) assessing the financial stability of the project.

5 Additional Required Documents for Projects Existing < Less Than 12 Months or Under- Construction Projects: a. Builder s Certification of Plans, Specifications and Site, Form HUD must be signed and dated (documentation must be submitted to mitigate conditions noted on the Form HUD-92541); b. AFHMP (Form HUD-935.2C), VAMA or Item 11d on Form HUD-92541, Builder s Certification must be signed and dated; c. Estimated Construction Completion Date / Completion Date of the Previous Legal Phase (include legal phasing schedule) (Completion Plan); d. Phase I Environmental Assessment Report (less than 12 months old); e. Permit or equivalent; f. Final Certificate of Occupancy or equivalent. The Certificate of Occupancy must be based upon a minimum of three inspections (typically the footing, framing and final); g. HUD-Approved Builder s Ten Year Warranty (with a final inspection by a FHA Roster Inspector) is required in jurisdictions that do not issue a building permit (or its equivalent) prior to construction and a Certificate of Occupancy (or its equivalent) (based upon a minimum of three inspections) upon completion of construction; h. Current site photographs; and i. Inspection Reports are required in jurisdictions that do not issue building permits (or equivalent) prior to construction and a certificate of occupancy (or its equivalent) upon completion of construction. Additional Required Documents for 2-4 Unit Projects: a. A recorded Memorandum of Understanding between the homeowners defining each unit owner s responsibilities for example, maintenance/repair/replacement of common areas including sidewalks, driveways, common walls (includes side by side or vertical type units), etc.; and b. A plan for or evidence of homeowners agreement (if required by the State). 6. All of the above documents must be uploaded to Condo Review. Note: Uploading documents to anything other than Condo Review will result in delays in processing. 7. The review will begin once the AFR UW has signed off on the appraisal and all of the required documentation has been uploaded to Condo Review. 8. Once the condo review is completed, the AFR UW will update the conditional approval accordingly.

6 ***Turn Times: Fannie Mae Lender Limited Review: hours Fannie Mae CPM Expedited Review for Established Projects: hours Fannie Mae Lender Full Review: hours Fannie Mae CPM Expedited Review for New Projects: 5-7 days FHA HRAP: approximately 60 days Note: Turn times begin after all of the required documentation has been received and is deemed complete/acceptable. ***Reminders: Fannie Mae PERS Review are not permitted FHA Proposed Projects, Gut/Non-gut rehabilitations, and Conversions are not permitted Manufactured Housing is not permitted New or newly converted condos in Florida are not permitted LTVs for Fannie Mae Limited Lender Reviews are 80% for Principal Residences, 75% for Second Homes. Investment Properties are not eligible for Limited Lender Reviews. Note: Fannie Mae maximum LTV for condominiums in FL is 75%. The HOA questionnaire fee must be disclosed on Block 3 of the GFE