Fillable Form 3.: Condo Project Approval Documentation (WestGen Lending)

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Form 3.: Condo Project Approval Documentation (WestGen Lending)

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The Form 3.: Condo Project Approval Documentation (WestGen Lending) form is 6 pages long and contains:

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  • 100 check-boxes
  • 107 other fields

Country of origin: US
File type: PDF

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P
age 1 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
Condo Project Approval Documentation
All documentation should be submitted at one time. The subject line of the email should
contain the loan number, Borrower’s last name, and the project name.
1.
Master/Blanket Insurance Policy
2.
HO-6 Policy/walls in (if required)
3.
Flood Insurance Policy (if flood insurance required)
4.
Current projected budget
5.
Evidence of fidelity bond/crime insurance (if project has more than 20 units)
6.
Engineers report, current replacement reserve study. (Gut and non-gut rehabs)
7.
Signed and dated Conventional Condo Questionnaire
N
OTE: We will not consider condominiums that require a PERS Review, including:
•
Condos that contain manufactured homes.
•
Newly converted non-gut rehabilitation projects that contain more than 4 units.
General Information
Borrower(s) Name:
Date:
Loan Number
Phase Number (if applicable):
Project Name:
Project Address
Street: City:
State: Zip Code: County:
Subject Property Address
Street: Unit #:
City: State: Zip Code:
Association / Management Company Information
Name of Association / Management Company:
Street: City:
State: Zip Code: Phone Number:
HOA Tax ID:
HOA Management Company Tax ID:
Page 2 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
Please have the project management contact answer all
questions, sign, and date the form. Your timely
response is appreciated.
Project Profile:
(To be completed by HOA or Management Company)
Year Built
Monthly HOA
Dues
Total Units in
Project
Primary /
Second Home
Units
Investor Units
Retained by
Developer
1. Are the units owners in control of the HOA? If yes, as of (mm/yyyy) Yes No
2. Complete the following ownership of units
Entire
Project
Subject
Legal Phase
(in which the
unit is
located) if
applicable
Total number of units
Total number of units sold and closed
Total number of units under bona-fide sales contracts
Total number of units sold and closed or under contract to owner
occupants
Total number of units sold and closed or under contract to second
homeowners
Total number of units sold and closed or under contract to investor
owners
Total number of units being rented by developer, sponsor, or converter
Total number of units owned by the HOA
Pa
ge 3 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
3. Complete the following table if more than one unit is owned by the same individual
or entity
Individual / Entity Name
Developer or
Sponsor
Number
of Units
Owned
Percentage of
Total
Projected
Units
Number
Leased
at Market
Rent
Number
Leased
Under
Rent
Control
Yes No
Yes No
Yes No
Yes No
4. Do the unit owners have sole ownership interest in and the right to use the
project amenities and common areas?
Yes No
5. If NO, explain who has ownership interest and rights to use the project amenities and
common areas.
6. Are any units in the project used for commercial or non-residential purposes? Yes No
7. If YES, complete the following table.
Type of Commercial or
Non-Residential Use
Name of Owner or
Tenant
Number of
Units
Square
Footage
% of Square
Footage Total
Project
Square
Footage
9. Is the project complete and not subject to additional phasing?
If NO, please answer the following questions.
Yes No
•
Yes No
•
Yes No
Pa
ge 4 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
Yes No
Yes No
• If yes, date
transferred
• If no, estimated date the
transfer will occur
10. Is the project a conversion within the past 3 years of an existing structure
that was used as an apartment, hotel/resort, retail or professional business,
industrial or for other non- residential use?
Yes No
• Was the conversion a full gut rehabilitation of the existing structure(s),
including replacement of all major mechanical components? (Broker to
document the following for gut rehab and 2-4 unit non gut rehab
Yes No
• Does the report from the licensed engineer indicate that the project is
structurally sound, and that the condition and remaining useful life of
Yes No
• Are all repairs affecting safety, soundness, and structural integrity
Yes No
Yes No
Yes No
Yes No
12. Are the units separately metered for utilities?
Yes No
• Is having multiple units on the same meter common and customary for
Yes No
• Does the project’s budget include adequate funding for utility
Yes No
• Is the project located on contiguous parcels of land, (Except for public
Yes No
Yes No
14. Does the project have split ownership arrangements, mandatory or
voluntary rental pooling arrangements, or other restrictions on the unit
Yes No
15. Does the project consist of property that is not real estate (e.g. houseboat,
Yes No
16. Is the project/association/developer part of any type of pending or current
litigation?
Yes No
17. Is the project an investment security?
Yes No
Pa
ge 5 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
18. Is it a live work project? If yes, is it mostly residential in character and are
Yes No
19. Are multi-dwelling units allowed (owner owns more than 1 unit secured by a
Yes No
20. Is the project subject to zoning restrictions which would prohibit the project
Yes No
21. Does the project have any non-incidental business operation owned or
operated by the HOA?
If YES, what percentage of the project's budget comes from
non-incidental business operations? _________%
Yes No
Yes
No
23. Are the unit owners required to pay mandatory upfront and/or periodic
membership fees for use of recreational amenities not owned by the
HOA? (i.e. owned by an outside party including builder/developer)
Yes No
24. Does the project contain manufactured homes?
Yes No
25. Is the lender liable for delinquent HOA charges?
Yes No
26. How many units are 60 days or more days delinquent on common expense
27. Projects consisting of 21 or more units: Does any individual or entity own
more than 10% of total units?
Yes No
28. Projects consisting of 5-20 units: Does any individual or entity own more
than two units?
Yes No
29. Projects consisting of 2-4 units: Does any individual or entity own more than
Yes No
30. Are any units subject to Deed or resale restrictions?
If YES, how many below market rate units or number of units with other
restrictions such as low-income or moderate-income purchases/age
Yes No
31. Are the common elements/limited common elements insured to 100%
replacement cost? (Broker to provide copy of policy)
Yes No
32. Are the units or common improvements located in a flood zone? (Broker to
Yes No
Yes No
34. If yes to 33, does the flood insurance cover 100% replacement; OR
Yes No
Yes No
36. Is Fidelity Insurance in place covering the maximum amount of funds that
will be in the custody of the Homeowners’ Association (HOA) or
Management Company at any time (Required if project is 20 or more
Yes No
37. Does the Fidelity Insurance policy include a provision that calls for at least
ten days’ written notice to the HOA or insurance trustee before the policy
Yes No
P
age 6 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
38. Does the Homeowners’ Association (HOA) budget provide adequate
f
unding for insurance deductible amounts? (Broker to provide copy o
f
Yes No
39. Does the condo retain a right of first refusal?
Yes No
40. Does any provision of the condominium documents give a condo unit owner
or any other party priority over any rights of the first mortgagee of th
e
c
ondo unit pursuant to its mortgage in the case of payment to the unit
owner of insurance proceeds or condemnation awards for losses to or
a
Yes No
Insurer on HOA’s Master Policy:
Phone Number:
Contact and Signature (to be completed by HOA or Management Company)
Company Name
Contact:
Title
Email:
Phone Number:
Fax Number:
By signing below, I certify
that the information represented on this form is true and correct to the best of
my knowledge.
NOTE: Broker to submit property insurance policies to document subject condominium meets
all FNMA property insurance requirements. (See FNMA website for full requirements:
https://www.fanniemae.com/content/guide/selling/b7/3/04.html)
Master or blanket type of insurance policy that covers 100% of the insurable replacement cost of the
project improvements, including the individual units in the project. The maximum deductible must be no
greater than 5% of the face amount of the policy
HO-6 Policy required if the unit interior improvements are not included under the terms of this policy
type, the borrower is required to have an HO-6 policy with coverage, as determined by the insurer,
which is sufficient to repair the condo unit to its condition prior to a loss claim event
Date:
Signature:
click to sign
signature
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P
age 7 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
Liability Insurance
Fannie Mae’s project liability insurance requirements for condo, co-op, and PUD projects are as follows:
• Liability insurance coverage is required and must be verified as part of the review of a condo or
co-op project with the exception of condo projects reviewed under the Limited Review method.
In addition, liability insurance coverage is also required and must be verified for attached units in
new PUD projects.
• The HOA or co-op corporation must maintain a commercial general liability insurance policy for
the entire project, including all common areas and elements, public ways, and any other areas
that are under its supervision. The insurance must also cover commercial spaces that are owned
by
the HOA or co-op corporation, even if they are leased to others. The commercial general
liability insurance policy must provide coverage for bodily injury and property damage that results
from the operation, maintenance, or use of the project’s common areas and elements.
• The amount of coverage must be at least $1 million for bodily injury and property damage for any
single occurrence.
• If the policy does not include severability of interest/separation of insureds in its terms, Fannie
Mae requires a specific endorsement to preclude the insurer’s denial of a unit owner’s claim
because of negligent acts of the HOA or co-op corporation or of other unit owners.
• The policy should provide for at least ten days’ written notice to the HOA or co-op corporati
on
bef
ore the insurer can cancel or substantially modify it. For condo and co-op projects, similar
notice also must be given to each holder of a first mortgage or share loan on an individual unit i
n
t
he project.
Flood Insurance Coverage Requirements
(See FNMA Website: https://www.fanniemae.com/content/guide/selling/b7/3/07.html
)
The minimum amount of flood insurance required for most first mortgages secured by one- to four-unit
properties, individual PUD units, and certain individual condo units (such as those in detached condos,
townhouses, or rowhouses) is the lowest of:
• 100% of the replacement cost of the insurable value of the improvements;
• the maximum insurance available from the NFIP, which is currently $250,000 per dwelling; or
• the unpaid principal balance of the mortgage.
If a first mortgage is secured by a unit in an attached condo, co-op, or PUD project and any part of the
improvements are in an SFHA, the lender must verify that the HOA or co-op corporation maintains a
master or blanket policy of flood insurance and provides for premiums to be paid as a common expense.
S
tand-alone flood insurance dwelling policies for an attached individual condo unit are not
acceptable. A master condo flood insurance policy must be maintained by the HOA, subject to the
coverage requirements below. (For detached units, refer to the requirements described in Coverage for
First Mortgages above.)
Condo projects:
The HOA must obtain a Residential Condominium Building Association Policy or equivalent private flood
insurance coverage for each building that is located in an SFHA. The policy must cover all of the common
elements and property (including machinery and equipment that are part of the building), as well as each
of the individual units in the building.
T
he master flood insurance policy must be at least equal to the lower of
• 80% of the replacement cost, or
• the maximum insurance available from NFIP per unit (which is currently $250,000).
I
f the condo project master policy meets the minimum coverage requirements above but does not meet
the one- to four-unit coverage requirements (described in Coverage for First Mortgages), a supplemental
policy may be maintained by the unit owner for the difference.
P
age 8 of 8
This is not a commitment to lend. For use by mortgage professionals only. WestGen Lending is a DBA of Beckam Funding Corp. Available loan amounts and LTV limits subject to Beckam Funding Corp. underwriting
review. Beckam Funding reserves the right to revise programs, rates, and guidelines without notice. All loans are made in compliance with federal, state, and local laws. Beckam Funding Corp. is a California Corporation,
Licensed by Department of Business Oversight under California Finance Lenders Law License #60DBO102460. NMLS# 317332
The contents coverage should equal 100% of the insurable value of all contents (including machinery and
equipment that are not part of the building), owned in common by association members. If the condo
project has no master flood insurance policy or if the master flood insurance policy does not meet the
requirements above, mortgages securing units in that project are not eligible for delivery to Fannie Mae.
Note: DU Refi Plus and Refi Plus loans secured by units in a condo project are not required to meet the
flood insurance requirements for master flood insurance policies stated in this section. Rather, if no master
policy is in place, a standalone dwelling policy may be maintained by the unit owner to meet the full one-
to four-unit requirements. If the master policy is deficient (by any amount), a supplemental policy may be
maintained by the unit owner for the difference between the master policy and the one- to four-unit
requirements.
P
rojects Requiring Fidelity/Crime Insurance
Fidelity/crime insurance is required for all condo projects, with the following exceptions that do
not require fidelity/crime insurance:
• condo projects reviewed under the Limited Review method,
• condo or co-op projects consisting of 20 units or less, or
• condo or co-op projects that would need fidelity/crime insurance coverage of $5,000 or less
(based on the calculations described in the Amount of Coverage below).
Note: In states that have statutory fidelity/crime insurance requirements, Fannie Mae accepts those
requirements in place of its own.
R
equirements for Who Must Be Covered
The HOA or co-op corporation must have blanket fidelity/crime insurance coverage for anyone who either
handles or is responsible for funds that it holds or administers, whether or not that individual receives
compensation for services, including coverage for a management agent. The insurance policy must name
the HOA or co-op corporation as the insured and the premiums should be paid as a common expense by
the association or corporation. A management agent that handles funds for the HOA or co-op corporation
should additionally be covered by its own fidelity/crime insurance policy, which should provide the same
coverage required of the HOA or co-op corporation.
Amount of Coverage
The HOA or co-op corporation policy must cover the maximum funds that are in the custody of the HOA
or co-op corporation or its management agent at any time while the policy is in force. Fidelity/crime
insurance is not required if the maximum estimated funds are less than or equal to $5,000. A lesser
amount of coverage is acceptable if the project’s legal documents require, or another source acceptable
to the lender verifies, that the HOA or co-op corporation and any management company adheres to one
or more of the following financial controls:
• Separate bank accounts are maintained for the working account and the reserve account, each
with appropriate access controls, and the bank in which funds are deposited sends copies of the
monthly bank statements directly to the HOA or co-op corporation.
• The management company maintains separate records and bank accounts for each HOA or co-
op corporation that uses its services, and the management company does not have the authority
to draw checks on, or transfer funds from, the reserve account of the HOA or co-op corporation.
• Two members of the Board of Directors must sign any checks written on the reserve account.
Even then, the fidelity/crime insurance coverage must equal at least the sum of three months of
assessments on all units in the project, unless this calculated amount is less than or equal t
o
$5,
000, in which case fidelity/crime insurance is not required.
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Form 3.: Condo Project Approval Documentation (WestGen Lending)

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Completed 27 June 2021

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