HOA Legi-Slate

Several months ago I blogged that Fannie Mae had amended its guidelines regarding eligible condominium projects. In response to current market conditions Announcement 08-34, issued earlier this month, includes the following revisions:

1. The 15% delinquency cap requires that no more than 15% of the total units may be more than 30 days delinquent;
2. There must be fidelity insurance if there are more than 20 units in the project;
3. Borrowers must obtain a “walls-in” coverage policy (commonly known as HO-6 policy) unless the lender can document that the master policy of the Association provides the same interior unit coverage;
4. Master insurance policies covering multiple unrelated condominiums are no longer acceptable (if they ever were); and
5. The owner occupancy ratio of 51% includes REO owned units for sale as owner occupied units.