Does FHA have a formal definition of a “site condo”?

Does FHA have a formal definition of a “site condo”?

“I received information from a client that FHA recently issued a directive in Mortgagee Letter 2011-22 that “site condos” are to be placed on FNMA form 1073. I know one when I see one but I wondered if FHA has the same concept that I do. If anyone can tell me where in the maze of FHA I can see a copy of their definition I would appreciate the help.”

It just so happens that I own a property down in TN that is a “Site Condo” so the question spurred me on to do a little digging! What I found was HUD’s Mortgagee Letter 2011-12

Prior to the release Mortgagee Letter ML11-22, HUD had exempted so-called “Site Condominiums” from the requirement to become approved in order for FHA financing to be allowed within the project. ML11-22 clarifies what a Site Condominium is in order for it to not be required to obtain HUD’s approval.

Site Condo – A site condominium is defined as a single family totally detached dwelling (no shared garages or any other attached buildings) encumbered by a declaration of condominium covenants or condominium form of ownership.

Pg. 19, Unique Projects, section 1.8.1 of the (Condominium Project Approval and Processing Guide) further outlines and defines what a Site Condo is:

Appraisal Scoop

  • Single family totally detached dwellings (no shared garages or any other attached buildings or e.g. archways, breezeways); and
  • Are encumbered by a declaration of condominium covenants or condominium form of ownership; and
  • The condominium unit consists of the entire structure as well as the site and air space and are not considered to be common areas or limited common areas; and
  • Insurance and maintenance costs are totally the responsibility of the unit owner; and
  • Any common assessments collected will be for amenities outside of the footprint of the individual site.

OK!  So I know what a Site Condo IS, but I thought we always reported them on the Fannie Mae 1004 appraisal report.  Right?  That WAS true . . . until this ML.

Appraisal data is collected and reported on Fannie Mae form 1004 , in accordance with the Valuation Protocols, Appendix D of HUD Handbook 4150.2.

However, THIS ML and the Guide clarify, expand, consolidate and update existing guidance, and replaces MLs 2009-46 a, 2009-46 b and 2011-03.

Although not subject to the general condominium approval requirements, the applicable ADP codes for Site condominiums are 731 (Adjustable Rate Mortgages) and 734.

Comments

“I received information from a client that FHA recently issued a directive in Mortgagee Letter 2011-22 https://rksloans.com/installment-loans-vt/ that “site condos” are to be placed on FNMA form 1073. I know one when I see one but I wondered if FHA has the same concept that I do. If anyone can tell me where in the maze of FHA I can see a copy of their definition I would appreciate the help.”

It just so happens that I own a property down in TN that is a “Site Condo” so the question spurred me on to do a little digging! What I found was HUD’s Mortgagee Letter 2011-12

Prior to the release Mortgagee Letter ML11-22, HUD had exempted so-called “Site Condominiums” from the requirement to become approved in order for FHA financing to be allowed within the project. ML11-22 clarifies what a Site Condominium is in order for it to not be required to obtain HUD’s approval.

Site Condo – A site condominium is defined as a single family totally detached dwelling (no shared garages or any other attached buildings) encumbered by a declaration of condominium covenants or condominium form of ownership.

Pg. 19, Unique Projects, section 1.8.1 of the (Condominium Project Approval and Processing Guide) further outlines and defines what a Site Condo is:

Appraisal Scoop

  • Single family totally detached dwellings (no shared garages or any other attached buildings or e.g. archways, breezeways); and
  • Are encumbered by a declaration of condominium covenants or condominium form of ownership; and
  • The condominium unit consists of the entire structure as well as the site and air space and are not considered to be common areas or limited common areas; and
  • Insurance and maintenance costs are totally the responsibility of the unit owner; and
  • Any common assessments collected will be for amenities outside of the footprint of the individual site.

OK!  So I know what a Site Condo IS, but I thought we always reported them on the Fannie Mae 1004 appraisal report.  Right?  That WAS true . . . until this ML.

Appraisal data is collected and reported on Fannie Mae form 1004 , in accordance with the Valuation Protocols, Appendix D of HUD Handbook 4150.2.

However, THIS ML and the Guide clarify, expand, consolidate and update existing guidance, and replaces MLs 2009-46 a, 2009-46 b and 2011-03.

Although not subject to the general condominium approval requirements, the applicable ADP codes for Site condominiums are 731 (Adjustable Rate Mortgages) and 734.

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