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What this task is

This task collects documentation for condominium projects related to:
  • The project’s master hazard insurance policy, and
  • The Covenants, Conditions, and Restrictions (CC&Rs) or equivalent governing documents.
The goal is to confirm that the project carries appropriate insurance coverage at the association level and that the governing documents do not create unacceptable legal or financial risks.

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When this task is required

This task is required when:
  • The subject property is a condominium unit, and
  • The borrower has identified a specific subject property (i.e., this is not just a pre-qualification without a property).
In these scenarios, the lender must evaluate the condominium project as a whole, not just the individual unit.

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Why this task is required

For condominium loans, lenders are underwriting both the borrower and the project. Project-level issues can materially affect:
  • The marketability of the collateral.
  • The lender’s ability to recover value in the event of default.
  • The borrower’s ongoing risk exposure (for example, inadequate master coverage or unusual legal restrictions).
The master insurance policy helps the underwriter confirm:
  • Adequate hazard coverage for the building structure and common areas.
  • That required coverage types (such as property, liability, and, when applicable, flood) are in place.
The CC&Rs or equivalent documents help the underwriter evaluate:
  • Use restrictions, leasing limitations, and investor concentration concerns.
  • Assessment rights and potential for large or unlimited special assessments.
  • Other provisions that may conflict with agency or investor eligibility rules.
Without these documents, the lender cannot fully determine whether the condominium project meets the applicable guidelines, even if the borrower is otherwise strong.

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Documents needed to resolve this task

To satisfy this task, provide:
  • Evidence of the condo master insurance policy, such as:
    • The insurance certificate or declarations page for the association’s master policy.
    • Documentation showing coverage types, limits, deductibles, and effective dates.
  • Current CC&Rs or equivalent governing documents for the condominium project:
    • All relevant sections that outline rights and obligations of unit owners, common area maintenance, and assessment authority.
    • Any amendments or supplements that modify key terms.
These materials allow the underwriter and any project review team to confirm that the condo project complies with investor, agency, and internal risk standards for condominium lending.