Condo/PUD Approval Guide

Wholesale and NDC

Condo/PUD Guides

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Condo/PUD Approval Guide

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Condo/PUD Guides

Condo/PUD Approval Guide

Condo Overview

A condominium is a form of ownership characterized by holding title to a single unit together with a proportionate undivided ownership interest in the common elements. Common elements typically include land, roofs, floor, walls, lobbies, and community spaces and facilities. The common elements are usually maintained but not owned, by a non-profit homeowner's association.

Condominium Project Review Process

The project must meet the requirements below when submitted to FCBM for review:

The Broker should review the Fannie Mae, FHA & VA approved project lists prior to submitting a review request:

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The Broker will need to follow the documentation requirements if submitting a loan to FCBM under the FNMA or FHA project classification code:

1. FCBM underwriter will only complete Limited Reviews on loans that are approved as a Limited Review by DU and must be underwritten by FCBM.

2. The Project must be on Fannie Mae's PERS approved list prior to delivering a loan submission to FCBM. FCBM will not submit Projects that need Fannie Mae's PERS (Project Eligibility Review Service) to be completed.

3. FCBM will not review projects having deed restrictions. The deed of the property must be researched prior to loan submission for the presence of any deed restrictions via the Florida Capital Condo review department to determine eligibility.

4. FCBM will accept and clear the project to "Lender Full Review" guidelines. a. Check the FCBM website to see if the project related to your loan has been previously reviewed. The Project Approval/Denial list can be at within the Resource Center. The list includes both the project approval expiration and the insurance expiration dates. Please be sure to note both the project and insurance expiration dates. b. Email our Condo Review Department at condoreview@ with your request ? Include the name and location of the condo project ? Include the FCBM loan number related to the request ? Indicate what kind of request you are making

ii. Previously approved project - the project is on the list and insurance and the approval are not expired

iii. Previously approved project that is expired ? the insurance or approval date is expired iv. Note: On previously approved projects with expired insurance, it will remain the Broker's

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responsibility to obtain the new insurance and documents and to send copies of those documents to the Condo Review Department v. Previously denied project - the project is on the list, but was previously denied. Please contact the Florida Capital Condo Review Department for details on denial reason and next steps. vi. New review ? the project is not on the list as an approved or denied project (complete and submit form - FCBM Condo Review Exhibit B Rev 2014) vii. For projects with other codes - "Time Rejected, Withdrawn, Conditional Approval, or Approved Borrower Specific" please call our Condo Approval Department for assistance in determining how to best proceed

The Condo Review Department will review your project and once review is complete

ii. On previously approved projects, the Condo Review Department will upload an updated Approval into Mortgagebot/ImageFlow

iii. You will receive an email indicating that the approval/denial documents have been uploaded into the Mortgagebot/ImageFlow imaging system

iv. The documents will be located in the "Condo Docs" folder in the imaging system

Questions regarding declines or other project review issues can be discussed directly with our Condo Review Department at condoreview@ or call (941) 896-3997 to discuss your project

All condo documents must be sent together. FCBM will not accept loans requiring condo review without prior approval by the Florida Capital Bank Condo Review Department

? FCBM is responsible for all fees associated in obtaining condo approval. Excluding HARP approvals, which is at the cost of broker/customer.

? The appraisal must be completed in its entirety including all specific current data in regards to condo unit sales, ownership, etc.

New and/or Established Condominium Projects

There are two types of condominium projects ? new and established:

New Projects are projects in which less than 90 percent of the total units have been conveyed to the unit purchasers. New projects also include projects that are not fully complete, such as proposed construction, or the proposed, new construction or the proposed or incomplete conversion of an existing building to a condominium. New Projects also include condos that have never been turned over to the homeowners association by the developer.

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Note: Not eligible in Florida

Established Projects are projects in which 90 percent or more of the total units have been purchased and conveyed to the unit purchasers, the project or conversion is complete, and the project has been turned over to the homeowners association by the developer.

Ineligible Project Criteria

1. Condominium Hotel (a.k.a. Condotel)*: A project that has a rental desk, short-term occupancy, and cleaning services that operates as a commercial hotel even though the units are owned individually.

2. Multi-Dwelling Unit Condominium: A project that permits an owner to hold title to more than 1-unit, with ownership evidenced by a single deed and mortgage.

3. Non-Conforming Use of Land: A project that represents a legal but nonconforming use of the land if zoning regulations prohibits rebuilding the improvements to its current density in the event of their partial or full destruction.

4. Timeshare or segmented ownership 5. Houseboat Project 6. A project where more than 25% total space is used for non-residential or commercial

purposes. 7. No single entity (the same individual, investor group, partnership, or corporation) may own

more than 10% of the total units in projects with 21 or more units. Projects with 5 to 20 units, no more than 2 units. If the project has fewer than 10 units, a single entity may not own more than 1 unit. In the case of 2-4 unit condominium projects, all but one unit must have been sold to principal residence or second home purchasers. For limited review transactions, the appraisal can be reviewed to obtain this information. 8. New projects offering excessive sale/financing structures in excess of standard interested party contribution policy including builder/developer contributions, sales concessions, HOA or principal and interest payment abatements, and/or contributions not disclosed on the HUD 9. Any project that the homeowners association is named as a party to current litigation or, if the project has not been turned over to the homeowners association, the project sponsor or developer is named as a party to current litigation that relates to project. Depending on the extent and type of litigation involved, exceptions may be considered but must be reviewed by The Florida Capital Bank Condo Review Department prior to approval. Note: Projects for which the lender determines that pending litigation is minor such as slip and fall litigation, or non-monetary litigation involving neighbor disputes or rights of quiet enjoyment are not considered ineligible projects provided the pending litigation has no impact on the safety, structural soundness, habitability or functional use of the project. Also, Projects where the HOA is named as the plaintiff in a foreclosure action or as the plaintiff in an action for past due HOA dues are not considered ineligible projects. 10. A project that consists of manufactured housing units. 11. A project for which FCBM's concentration level exceeds 15% of the total number of units in the project. 12. Projects with non-incidental business operations owned or operated by the homeowners

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association such as, but not limited to, a restaurant, spa, health club, etc. if the HOA is receiving more than 10% of its budget income from non-incidental business arrangements. Non-incidental income from the following sources is permitted provided the income does not exceed 15% of the project's budgeted income:

? Income from the use of recreational amenities or services owned by the HOA for the exclusive use by unit owners in the project or leased to another project according to a shared amenities agreement, or

? Income from the leasing of units in the project acquired by the HOA through foreclosure.

13. Investment Securities, defined as projects that have documents on file with the Securities and Exchange Commission or projects where unit ownership is characterized or promoted as an investment opportunity.

14. Any project or building that is owned by several owners as tenants-in-common, or by a homeowners association in which individuals have an undivided interest in a residential apartment building and land, and have the right to exclusive occupancy of a specific apartment in the building.

15. Projects with mandatory upfront or periodic membership fees for the use of recreational amenities, such as country club facilities and golf courses, owned by an outside party (including the developer or builder). Membership fees paid for the use of recreational amenities owned exclusively by the HOA or master association are acceptable.

16. Any project that permits a priority lien for unpaid common expenses in excess of Fannie Mae's priority lien limitations.

17. New or newly converted projects in Florida with attached units that have not been approved by Fannie Mae through the PERS process, as required.

18. Projects that represent a legal, but non-conforming, use of the land, if zoning regulations prohibit rebuilding the improvements to current density in the event of their partial or full destruction.

Note: Florida Condominiums located in Miami Dade or Broward County are not eligible for financing at FCBM. Loans with project exceptions are not eligible for underwriting.

Type of Project Reviews

Florida Capital Bank Mortgage purchases conventional loans on condominiums that meet Fannie Mae's project requirements in addition to the requirements set forth in this Manual. These project requirements depend on the basic condominium classification. The basic condominium classifications are as follows:

1. Limited Review: Allows the evaluation and approval of condominium projects based on limited documentation which must be determined by DU. Eligibility is based on specific loan level criteria, including LTV, occupancy, and the method by which the loan is evaluated and decisioned. To be eligible for purchase, the project must meet the Limited Project Review

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