B4-2.3-01, Eligibility Requirements for Units in PUD Projects (03/03/2021)

For a project to qualify as a PUD, all of the following requirements must be met:

• each unit owner’s membership in the HOA must be automatic and nonseverable,

• the payment of assessments related to the unit must be mandatory,

• common property and improvements must be owned and maintained by an HOA for the benefit and use of the unit owners, and

• the subject unit must not be part of a condo or co-op project.

Zoning is not a basis for classifying a project or subdivision as a PUD. Units in projects or subdivisions simply zoned as PUDs that include the following characteristics are not defined as PUD projects under Fannie Mae’s policies. These projects

• have no common property and improvements,

• do not require the establishment of and membership in an HOA, and

• do not require the payment of assessments.

Fannie Mae classifies PUD projects as either

• Type E—established PUD projects in which the developer has turned over voting control of the HOA to the unit purchasers.

• Type F—new PUD projects in which the developer has not turned over voting control of the HOA to the unit purchasers.

PUD projects are not eligible for review using the PERS process, unless they contain single-wide manufactured housing, which require a PERS submission.

Lenders must determine that the PUD project and subject unit meet the requirements described in Requirements Applicable to All Properties in a Condo, Co-op, or PUD Project in B4-2.1-01, General Information on Project StandardsB4-2.1-01, General Information on Project Standards.

Note: Any unit located in a condo or co-op project within a larger PUD project or master association must meet the applicable requirements for condo or co-op projects.