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FNMA Updates Requirements for Unaffiliated Condo Associations or Projects

On October 30, 2013 Fannie Mae released Servicing Announcement 2013-22 outlining various servicing policy changes.  In this announcement, Fannie Mae is overturning its original decision (SVC-2011-23) that allowed servicers to accept a master or blanket insurance policy that combined insurance coverage for multiple condominiums and other residential or substantially residential projects that were unaffiliated as long as the servicer ensured that the policy meet all the stipulated requirements.

Fannie Mae is now prohibiting servicers from the use of a master or blanket insurance policies that cover multiple, unaffiliated projects.  Policies that renew on or after February 1, 2014 will be impacted by this new rule.