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B4-2.2-01, Limited Review Process (07/05/2023)

Introduction

This topic contains information on the Limited Review process performed by lenders, including:


Unit and Project Type Eligible for Limited Review

To be eligible for a Limited Review, the unit securing the mortgage must be an attached unit in an established condo project.


Transactions Eligible for a Limited Review

The following table describes the transactions that are eligible for a Limited Review.

Limited Review Eligible Transactions -Attached Units in Established Condo Projects (For Projects Outside of Florida)
Occupancy Type Maximum LTV, CLTV, and HCLTV Ratios
Principal residence 90%
Second home 75%
Investment property 75%

Attached units in established projects located in Florida are subject to more restrictive LTV ratio requirements under the Limited Review process. See  B4-2.2-04, Geographic-Specific Condo Project Considerations, for additional information.


Limited Review Eligibility Requirements

In completing a Limited Review, the lender must ensure that the project and subject unit meet the eligibility requirements described in the following table.

Limited Review Eligibility Requirements
  The project meets Requirements Applicable to All Properties in a Condo, Co-op, or PUD Project described in  B4-2.1-01, General Information on Project Standards.
  The project is not an ineligible project. (See  B4-2.1-03, Ineligible Projects).
  The project does not consist of manufactured homes.

Note: Manufactured housing projects require a Fannie Mae PERS review or a Full Review.

  No more than 15% of the total number of units in the project are 60 days or more past due in the payment of each special assessment.

These requirements apply to both DU loan casefiles and manually underwritten loans.

If the project and loan transaction are eligible for and meet all of the eligibility requirements of the Limited Review process, the lender is not required to validate that the project also meets the eligibility requirements of another project review type. However, if the LTV, CLTV, or HCLTV ratios exceed the limits above, or in the event the lender becomes aware of a circumstance that would cause the project or transaction to be ineligible under a Limited Review, the lender must use one of the other project review methods to determine project eligibility and the project must meet all of the eligibility requirements of that selected alternate project review type.


Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.

Announcements Issue Date
Announcement SEL-2023-06 July 05, 2023

 

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