Home Insurance in Austin>Question Details

Jim N E, Home Seller in Austin, TX

does a site condo need an HOA master policy that covers the structures?

Asked by Jim N E, Austin, TX Wed Jul 23, 2014

I'm trying to convert a two-unit property to condos, and I've received conflicting advice over what sort of master insurance policy I need for the HOA.

One insurance agent claimed that every condo needed a master policy that covered the structures (at least down to the studs). When I asked about site condos, he insisted that no mortgage company would write a loan for one of the units without a policy that covered the structures.

On the other hand, I've spoken a mortgage agent who said they qualified as site condos. (They meet the five criteria that FHA lays out; for FHLMC and FNMA, I'm not sure, but I think they'd be either "detached" or "two-unit to four-unit".) If they're site condos, then basically each unit owner gets their own policy -- just as for single-family -- and the HOA only needs a general liability policy.

Does this sound right? Have folks had experience with HOA master policies? Or with selling site condos? If it makes a difference, this is in Texas.

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