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Glossary of Terms used in Condo Project Manager
Affiliated Projects:
Condo, co-op, and PUD projects that are under the same master association or share the use of common facilities that are either owned individually or as part of a master association or development. Multiple condo, co-op, or PUD projects that do not have one of these characteristics, but are managed by the same management company, are considered unaffiliated projects.
Features that enhance the project but are not essential to the project's use. Examples include, but are not limited to, swimming pools, fitness centers, tennis courts, playgrounds, gardens, or beach access.
Commercial Space:
Space in a condo, co-op, or PUD project or in buildings in which a condo, co-op, or PUD project is located that is used for non-residential purposes. Examples include, but are not limited to, office space, retail shops, or apartment rentals.
Common Area Assessments:
Mandatory periodic or regularly charged fees or dues (also referred to as common charges or common expense assessments)assessed against individual unit owners in a condo or PUD project for additional capital to defray the homeowners' association's costs and expenses and to repair, replace, maintain, improve, or operate the common areas of the project.
Common Elements (Areas):
Those portions of a building, land, or amenities owned or managed by the homeowners' association of a condo or PUD project (or by a co-op project's co-op corporation) that are used by all of the unit owners, who share in the common expenses of their operation and maintenance. Common elements are defined in the project documents and may include, but are not limited to, swimming pools, tennis courts, and other recreational facilities, as well as common corridors of buildings, parking areas, and means of ingress and egress. (Also see amenities and common area assessments.)
Common Interest Apartments or Community Apartments:
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 of exclusive occupancy of a specific apartment in the building.
Completion Assurance:
A bond letter or other legal documentation assuring completion of improvements.
Conditional Project Approval:
The first stage of Fannie Mae's approval of a condo, co-op, or PUD project. It is issued after a preliminary review of the project, and it specifies any conditions that must be satisfied before Fannie Mae will issue a final approval for the project.
Condo Project Manager (CPM)™:
A web-based application available to lenders that supports a lender's Full Review of a condo project by providing key project eligibility questions to assist the lender in determining whether the project meets Fannie Mae's eligibility requirements.
Condominium (Condo):
A unit in a condominium project. Each unit owner has title to his or her individual unit, an individual interest in the project's common areas, and, in some cases, the exclusive use of certain limited common areas.
Condominium (Condo) Conversion:
Legal change in the ownership of an existing building (usually a rental project) to the condominium form of ownership through the recording of a declaration or master deed.
Condominium (Condo) Hotel:
Any project that is managed or operated like a hotel, motel, resort, inn, or lodge where the individual units are either sold as co-op or condo units.
Condominium (Condo) Unit:
A unit in a condominium project. Each unit owner has title to his or her individual unit, an individual interest in the project's common areas, and, in some cases, the exclusive use of certain limited common areas.
Transfer of title to the individual owner of a unit.
Cooperative (co-op) project:
A residential or mixed-use building wherein a corporation or trust holds title to the property and sells shares of stock representing the value of a single apartment unit to individuals who, in turn, receive a proprietary lease as evidence of title
A condominium project composed of individual units that are free-standing buildings.
Established Conversion:
A conversion of an existing structure into a condominium that meets all the criteria for an established project.
Established Condo Project:
A completed project with 5 or more units that meets ALL of the following criteria:
  • The project is 100% complete, including all units and common elements;
  • The project is not subject to additional phasing;
  • Control of the homeowners’ association (HOA) has been turned over to the unit purchasers; and
  • 90% or more of the units have been conveyed to the unit purchasers.
Final Project Approval:
The eligibility determination that is issued for a condo, PUD, or co-op project to indicate that the project's physical characteristics and marketability are acceptable to Fannie Mae, and that mortgages or share loans on units within the project may be delivered to Fannie Mae for purchase or securitization.
A multi-unit building in which each unit has its own entrance from the outside.
Gut Rehabilitation:
A project that has been developed by rehabilitating an existing building and creating individual units. The building is stripped down to its shell and, as rehabilitated, contains all new mechanical equipment including heating, exhaust, insulation, roofing, plumbing, and electrical. Individual units and common areas have new interiors, fixtures, appliances, and flooring.
A multi-unit building with 6 or more floors.
Homeowners' Association (HOA):
An entity formed to manage the day-to-day operation and long term interests of residential dwelling communities, including condo, co-op, and PUD projects. The HOA is typically created and vested with specific roles, responsibilities, and rights by the project's legal documents in compliance with applicable laws. For Fannie Mae's purposes, the term "HOA" includes a homeowners association, common interest community association, cooperative corporation, and other similar entities.
A development that consists of houseboats that are afloat and not permanently affixed to a foundation.
Investment Security:
Projects where unit ownership is characterized as an investment opportunity, projects that have documents on file with the Securities and Exchange Commission, or projects where unit ownership is promoted as an investment opportunity.
Investor Concentration:
The percentage of units in a condominium that are sold to investors compared to the number of units sold to all owners.
Leasehold Estate:
A way of holding title to a property wherein the borrower does not own the property but has a recorded long-term lease on it.
Master Association:
A governing association in a large condo or PUD community that is made up of representatives from associations covering specific areas within the project. In effect, it is an "umbrella" association that handles matters affecting the entire development, while the "sub" associations handle matters affecting their particular portions of the project.
Manufactured Housing:
Refer to the Fannie Mae Selling Guide.
A multi-unit building with 3 - 5 floors.
Mixed Use Project:
A project comprised of residential and non-residential (commercial) space, often featuring separate associations that represent the different components.
Multi-dwelling Unit Condominium:
A project in which an owner may hold title (or stock ownership and the accompanying occupancy rights) to more than one dwelling unit, with ownership of all of his or her units (or shares) evidenced by a single deed and mortgage (or share loan).
New Conversion or Newly Converted Project:
A condo or co-op project that was converted from an apartment or other use is defined as a newly converted project until it meets Fannie Mae's definition of an established project.
New Construction:
A project with more than 4 units (a proposed, under construction, or completed) that does not meet ALL the criteria for an established project.
Nonconforming Land Use:
A structure and/or use of land that is legal but does not comply with current, applicable land development regulations.
Non-Gut Rehabilitation:
A project that has been developed by rehabilitating an existing building and converted into individual units. The building, its mechanical equipment, and individual units typically have not been substantially rehabilitated or replaced.
Planned Unit Development (PUD):
A real estate project in which each unit owner has title to a residential lot and building and a nonexclusive easement on the common areas of the project. The owner may have an exclusive easement over some parts of the common areas (for example, a parking space). Fannie Mae does not purchase or securitize mortgages secured by PUD projects; it does purchase or securitize mortgages on individual units in a project.
Presale Percentage:
The percentage of units in a condominium project (or legal phase) that are under contract or sold compared to the total number of units in the project (or phase).
A dwelling or dwellings comprising two or more single-family units established as a condo, co-op, or PUD project.
Project Documents:
Recorded legal documents for a project and any master association that pertain to the formation of the project, the rights of the developer and limitations on the actions of the developer, the operation of the association, and sales of units in the project. The documents include, but are not limited to, the declaration of condominium or master deed; by-laws, rules and regulations; articles of incorporation; governing documents; covenants, conditions and restrictions (CC&Rs); offering circulars; and agreements as applicable to the project as well as any documents related to a master association or the overall project.
Project Legal Phase:
A development phase that is defined in the project documents. A project legal phase is not the same as a construction or marketing phase.
Project Standards Review Team:
Fannie Mae’s team of risk consultants that evaluate condominium project risk and viability.
Replacement Reserve Fund:
A dedicated fund set aside for the repair and replacement of common property in a condo, co-op, or PUD project.
A project composed of individual units that are attached buildings (sharing common walls).
Segmented Ownership:
A property right under which the purchaser has access to a property "segment" for a specific time.
Single Entity Owner:
The same individual, investor group (e.g., developer, sponsor, builder), partnership, or corporation that owns multiple units in a condo or co-op project. In its examination for project eligibility, the lender must determine compliance with Fannie Mae's single entity ownership requirements.
Single Investor Concentration:
No single entity, (the same individual, investor group, partnership, or corporation) other than the developer during the initial sales period, may own more total units in the project than the limits set forth in the Selling Guide.
Time Share:
A real estate development in which purchasers have the exclusive right to occupy a unit for a specified period of time each year, during which they have access to any amenities offered (such as swimming pool, tennis courts, putting greens, club house, etc.).
Two-to-Four Unit (2-4) Condo Project:
A project comprised of two to four residential units in which each unit is separately owned. A two- to four-unit project may be either a new or established project and may be comprised of attached and/or detached units.
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