NATIONAL – Condo Policy Changes
MORTGAGE News Daily: …Condo Policy Changes
By Rob Chrisman
November 16, 2015
And there are recent changes in condo lending policies.
This week FHA Principal Deputy Assistant Secretary Ed Golding announced changes to the FHA’s condominium policy. Secretary Golding stated that FHA would revise the current complex recertification process and limits on the types of property insurance that is considered acceptable coverage by FHA. These revisions were released in Mortgagee Letter 2015-27. ML 2015-27 provides a notice expanding the data used to calculate the owner-occupancy percentage, an expansion of eligible condominium project insurance coverage, and revised requirements for obtaining condominium project recertification. The requirements in ML 15-27 are applicable to all Title II programs, including the Home Equity Conversion Mortgage (HECM) insurance program, unless otherwise stated and are effective immediately for all condominium project approvals, recertification applications, annexations, or reconsideration submissions submitted for review.
Recently Pacific Union Financial, LLC announced the removal of ALL Florida Condo overlays. Florida condo transactions may now follow standard Fannie Mae/Freddie Mac condo policies. In addition, Pacific Union Financial is now allowing FHA and VA Manufactured Homes in the following states: Maryland, Pennsylvania and Wisconsin.
Recently Ditech spread the word that mortgages on properties encumbered by private transfer fee covenants prohibited in the Federal Register, are ineligible if those covenants were created on or after February 8, 2011. Fees that do not directly benefit the property are subject to C.F.R. Part 1228 and are therefore ineligible. However, Private transfer fees paid to the following to benefit the property are eligible: Homeowner Associations, Condominium Associations and certain tax-exempt organizations that use private transfer fee proceeds to benefit the property.
A Citi Correspondent credit policy overlay document has been updated based on recent credit policy updates. This update involves project approvals requiring a Project Certification Form (exhibit 24), or a similar form, required on all condo and coop projects. It is no longer required for PUD projects. Read: