Mortgage and Real Estate Blog

head_left_image

New CONDO and Townhouse Insurance rules to cause more pain in the housing industry.


Minneapolis, MN: Currently on Condominiums and attached Townhome units (PUD), Fannie Mae requires insurance coverage of the lesser of 20% of the unit’s appraised value or replacement cost.

HO-6 condo town home insurance in MNFor applications dated on or after January 1, 2012, 100% replacement insurance coverage of the exterior and interior of condominiums, or attached PUD (Townhome) units will be required.

If the “master” or “blanket” policy for the condominiums or attached town home development does not provide full coverage of the interior or is a “bare walls” policy, then an individual HO-6 "walls in” insurance policy must be obtained to reach the full 100%  replacement requirement.

The owners HO-6 policy must be sufficient to repair the interior of the unit, including any additions, improvements and betterments to its original condition in the event of a loss. The HO-6 policy is required to cover 100% of the insurable replacement cost of the unit’s interior improvements and betterments, including kitchen cabinets, lighting, flooring and plumbing fixtures. This updated insurance requirement will apply to all products and program types including Conventional Conforming, Non-Conforming, FHA and USDA Rural Development loans.

Recent changes in "Fidelity Bond Coverage" has created huge problems on Condo and Townhome financing, and this new insurance requirement is going to add another wall to financing these type of homes.

The only saving grace is that for most people, a walls in HO-6 Condo or Townhome Insurance policy should only run +/- about $160 per year.

 

CLICK THE SOCIAL MEDIA LINKS ABOVE - SPREAD THE WORD

 

 

 

Comment balloon 0 commentsJoseph Metzler • December 30 2011 11:02AM
New CONDO and Townhouse Insurance rules to cause more pain in the…
share
Minneapolis, MN: Currently on Condominiums and attached Townhome units (PUD), Fannie Mae requires insurance coverage of the lesser of 20% of the unit’s appraised value or replacement cost. For applications dated on or after January 1, 2012… more
FHA Extends Waiver of Anti-Flipping Rule. Why it doesn't matter!
share
FHA Extends Waiver of Anti-Flipping Regulations Through 2012. Minneapolis, MN: In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, the Federal Housing Administration.. more
Stop Renting - Busting a few myths about buying a home
share
No more excuses. Go buy a home! The housing market has changed dramatically, and everyone should be taking advantage of some of the most affordable home prices, and lowest mortgage rates in history You may be hearing a lot in the news today… more
Have mortgage interest rates finally bottomed out?
share
Have mortgage interest rates bottomed out? The most recent Freddie Mac's weekly Primary Mortgage Market Survey (www. FreddieMac. com) has the most recent average 30-year fixed rate mortgage at 4. 00% - about the same as it has been for the… more
Adjustable Mortgages Hit New Low
share
Adjustable Mortgages Hit New Low Historically in the United States, adjustable rate mortgages have always accounted for a small portion of overall mortgage loan choices. During the boom a few years ago, they jumped up dramatically, but still… more