Property Eligibility
Property Eligibility
Section 3.0 Property Eligibility
3.1 Appraisals
There are two collateral evaluation methods available for the second mortgage program.
3.1.1 Appraisal Options
A new 2055 appraisal is required if the review value is below the original appraisal value.
3.2 Minimum Property Standards
Minimum property standards include but may not be limited to:
3.2.1 Eligible Property Types
3.2.2 Ineligible Property Types
3.2.3 Acreage Limitations
3.3 State Ineligibility
All states eligible with exception of:
3.4 Title Vesting and Ownership
Ownership must be fee simple.
Acceptable forms of vesting are:
3.4.1 Inter Vivos Revocable Trust
Inter Vivos Revocable Trusts are allowed when the requirements outlined below are met.
Provide copy of Trust Agreement or Trust Certificate (where allowed by law) reviewed and approved by Title company. Title must not contain any title exceptions and offer full title protection without exception to the trust.
3.5 Leasehold Properties
In areas where leasehold estates are commonly accepted and documented via the Appraisal, loans secured by leasehold estates are eligible for purchase. The mortgage must be secured by the property improvements and the borrower’s leasehold interest in the land. The leasehold estate and any improvements must constitute real property, be subject to the mortgage lien, and be insured by the lender’s title policy.
Seller must provide documentation and Leaseholds must meet all FNMA eligibility requirements (i.e. term of lease).
3.6 Limitations on Financed Properties
Primary and Second Homes
Investor Properties
3.7 Disaster Areas
Sellers are responsible for identifying geographic areas impacted by disasters and taking the appropriate steps to ensure the subject property has not been adversely affected.
Subject properties that have been adversely affected by disaster events that receive a formal disaster declaration issued by local, state or federal departments of emergency management must follow the procedures listed below. The following guidelines apply to properties located in FEMA declared disaster areas, as identified on the FEMA website at http://www.fema.gov/disasters.
In addition, when there is knowledge of an adverse event occurring near and around the subject property location, such as earthquakes, hurricanes, floods, landslides, tornadoes, wildfires, volcanic eruptions, civil unrest or terrorist attacks, additional due diligence should be used to determine if the disaster guidelines should be followed.
Guidelines for disaster areas should be followed for 90 days from the disaster period end date or the date of the event, whichever is later.
See AMRES full Loan Eligibility Guidelines for additional specifics on Disaster Areas or FNMA Guidelines.
3.8 Declining Values
Properties in which the appraiser is reporting a declining trend in values for the subject’s market area are ineligible.
3.9 Condominiums
Fannie Mae eligible condominium projects allowed.
The seller may review and approve FNMA warrantable projects. Follow the review process required by Fannie Mae for Limited Review.
The following table from FNMA Seller’s Guide section B4-2.2-01 describes attached units in an established condo project that are eligible for a Limited Review.
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