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Conventional Condominium Guidelines

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Conventional Condominium Guidelines Conventional Condominium Guidelines Contents Condominiums................................................................................................................................................2 Project Documentation Retention And Expiration ...............................................................................................2 Detached Condominiums ...............................................................................................................................2 Fannie Mae Limited Review/ Freddie Mac Streamlined Review Requirements For Attached Established Projects .......2 Limited/Streamline Review Submission Requirements .................................................................................3 Limited Cash-Out Project Review Waiver...................................................................................................3 Limited Review Eligibility For Attached Units In Established Projects (Outside Of Florida) .................................3 Florida Limited Review Eligibility For Attached Units In Established Projects ...................................................3 Full Review..................................................................................................................................................4 Full Review Submission Requirements......................................................................................................4 Florida Project Review Requirements for Attached Units in New, Newly Converted, Established Projects ............4 Fannie Mae Type S/Freddie Mac Established Projects ................................................................................4 Fannie Mae Type S Pers Approval ...........................................................................................................5 Fannie Mae Type R/Freddie Mac New Projects ..........................................................................................5 Type R (New Projects) That Require Fannie Mae (Pers/Type T) Approval ......................................................6 Condominium Project Legal Document Review Requirements for Units in New or Newly Converted Projects .......6 Fannie Mae Type T Condominium ............................................................................................................7 Small Condominium Projects 2 To 4-Units ........................................................................................................7 FHA – Approved Condo Review Eligibility.........................................................................................................7 Additional Condominium Warranties ................................................................................................................8 Commercial Space .......................................................................................................................................8 Calculation of Commercial Space .............................................................................................................8 Condo-Hotel ................................................................................................................................................9 Conversions............................................................................................................................................... 10 Type R Conversion .............................................................................................................................. 10 Type S Conversion............................................................................................................................... 11 Insurance Requirements .............................................................................................................................. 11 Condominium Flood Insurance............................................................................................................... 11 California Condominium Earthquake Insurance ........................................................................................ 11 Liability Insurance ................................................................................................................................ 11 Master Hazard Insurance ...................................................................................................................... 11 HO-6 Insurance ................................................................................................................................... 11 Fidelity (Employee Dishonesty) Bond Insurance ....................................................................................... 11 Ineligible Projects ....................................................................................................................................... 12 Live-Work Projects ..................................................................................................................................... 14 Minor Litigation........................................................................................................................................... 14 Fannie Mae......................................................................................................................................... 14 Freddie Mac ........................................................................................................................................ 15 Project Budget ........................................................................................................................................... 15 Projects Consisting of Manufactured Homes ................................................................................................... 17 Single Entity Ownership............................................................................................................................... 17 Maximum Single Individual Or A Single Entity Ownership (Such As An Investor Group, Partnership Or Corporation) ........................................................................................................................................ 18 Shared Amenities ....................................................................................................................................... 18 VI. Underwriting Guidelines 1 of 19 07/15/2021 Return to Menu Conventional Condominium Guidelines CONDOMINIUMS All condominium projects, for non-delegated and table funded transactions, must be reviewed and approved by Flagstar’s Condo Review Department. Flagstar Bank utilizes Fannie Mae’s Condominium Project Management (CPM) system for all full project approvals. For Delegated Correspondent Lenders, Project Eligibility Certification Form, Doc. #3285, or similar form completed by the underwriter on all Condo transactions. PROJECT DOCUMENTATION RETENTION AND EXPIRATION Lenders must retain all of the project documentation needed to demonstrate that the project meets Fannie Mae’s eligibility requirements, including any documentation the lender relied upon to enter information into CPM. This documentation must be retained, and made available upon request, as long as lenders originate mortgages from the project, and until all mortgages sold to Fannie Mae have been liquidated. Expiration for Project Reviews Project Review Process Employed Fannie Mae Expiration Freddie Mac Expiration Limited/Streamline Review Must review and determine project Must have been completed within meets requirements within one year Full Review (with or without CPM) for one year prior to the note date prior to the Note date Established Projects Must have been completed within Full review for New Projects 180 days prior to the note date Must review and determine project meets requirements within 180 Approved by Fannie Mae through PERS approval must be valid days prior to the note date PERS (unexpired) as of the note Date FHA approval must be valid Approved by FHA N/A (unexpired) as of the note date DETACHED CONDOMINIUMS See Conventional Underwriting Guidelines for Detached Condominium requirements FANNIE MAE LIMITED REVIEW/ FREDDIE MAC STREAMLINED REVIEW REQUIREMENTS FOR ATTACHED ESTABLISHED PROJECTS To be eligible for limited/streamline review the following characteristics must be met: • Project or legal phase must be completed • Must not contain any characteristics under Ineligible Projects; • 90% of the units must be sold and conveyed • Control of HOA must be turned over to the unit owners • Project does not consist of manufactured homes • Project is not currently on Flagstar’s denied list VI. Underwriting Guidelines 2 of 19 07/15/2021 Return to Menu Conventional Condominium Guidelines LIMITED/STREAMLINE REVIEW SUBMISSION REQUIREMENTS Limited/Streamline Review Uniform Condominium Questionnaire, Doc. #3281 or similar form is required. A condominium questionnaire will not be required if the condominium is on the Flagstar approved list LIMITED CASH-OUT PROJECT REVIEW WAIVER Limited Cash-Out Project Review Waiver Requirements Fannie Mae 1 Freddie Mac Current Loan Fannie Mae must own Freddie Mac must own Maximum LTV 80% (CLTV/HCLTV LTV/CLTV/HCLTV Maximum LTV/CLTV/HCLTV 80% may be higher) Project is not a condo hotel or motel, houseboat, a timeshare or segmented Project Type ownership project, or include manufactured homes Insurance Complies will all applicable project related property and flood coverage Title Complies with all title insurance requirements 1. Fannie Mae-Loan must be delivered with Project Type Code “V” and any applicable
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