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									Conventional Condominium Financing




             April 6, 2010
Fannie Mae Approved Projects

      https://www.efanniemae.com/sf/refmaterials/approvedprojects/index.jsp




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Fannie Mae Approved Projects – Illinois




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New or Established Condo Projects


New                                                   Established
• The project is not fully complete                   • The project is 100% fully
  OR                                                    complete (all units AND all
                                                        common areas)and is not subject
• < 90% of units have been                              to additional phasing and
  conveyed OR
                                                      • At least 90% of units have been
• HOA is not turned over to unit                        conveyed to purchasers and
  owners yet
                                                      • HOA has been turned over to the
                                                        unit owners




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Top 5 Reasons for Condo Denials


1. Budget: The budget must be adequate and must have a line item in
   the budget for at least 10% going into a reserve account

2. Delinquent Assessments: Projects with more than 15% of the unit
   owners past due on HOA dues are ineligible

3. One Owner: One owner owns more than 10% of the units in the
   project.

4. Commercial or Non Residential Space: Projects with more than
   20% non residential space are ineligible.

5. Litigation: (including receivership)




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Owner Occupancy


• If the project is “new” at least 70% of the units sold or under contract
  must be owner occupied or second homes.

• If the loan needs mortgage insurance: at least 70% of the units must
  be owner occupied or second homes.

• If the subject is an investment property (established project): at least
  51% of the units must be owner occupied or second homes.




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Insurance Requirements


• Hazard Insurance: Must cover 100% of the insurable replacement
  cost

• Liability Insurance: At least $1M for bodily injury and property
  damage for any single occurrence

• Fidelity Insurance: Must be at least equal to three months of
  assessments on all units in the project

• HO6 “walls in” Insurance:




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Preliminary Documentation


• Copy of the recorded declarations (master deed) and bylaws

• Current budget and balance sheet

• Copy of the HOA Master Insurance

• Information on how to obtain a lender condo questionnaire

• Information on what type of insurance the purchaser is required to
  purchase




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Disclaimer

 The information contained is intended for the sole and exclusive use of the business
 entities to which it was distributed and is subject to change without notice. Loans are
 subject to credit review and approval.

 Fifth Third Mortgage Company, 38 Fountain Square Plaza, Cincinnati, OH 45263 an
 Illinois Residential Mortgage Licensee. Fifth Third Mortgage is the trade name used
 by Fifth Third Mortgage Company and Fifth Third Mortgage-MI, LLC. Fifth Third and
 Fifth Third Bank are registered service marks of Fifth Third Bancorp. Member FDIC.
 Equal Housing Lender.




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