Planned unit developments also have HOA fees and can look just like a regular subdivision. We must get a PUD rider when someone finances in one.
Fannie Mae defines a PUD as follows:
1. Planned Unit Development (PUD) â€“ General Definition. A real estate project in which each unit owner has title to a residential lot and building and a nonexclusive easement on the common areas of the project (for example, a clubhouse, pool, playground, entrance/exit, etc). The owner may also have an exclusive easement over some parts of the common areas (for example, a parking space). (See, FNMA Seller/Servicer Guide, Chapter 3, Glossary).
2. Planned Unit Development (PUD) â€“ Specific Requirements for Classification as a PUD. (See, FNMA Seller/Servicer Guide, Chapter 2, Section B4-2.3-01) A Planned Unit Development (PUD) is a project or subdivision that consists of common property and improvements that are owned and maintained by a homeownerâ€™s association for the benefit and use of the individual PUD units. In order for a project to qualify as a PUD, the following elements must be met:
a. There is common property for the project; and
b. Each unit ownerâ€™s membership interest in the homeownerâ€™s association must be automatic and non-severable; and
c. The payment of assessments related to the units must be mandatory; and
d. The project must not be a Condominium.
NMLS # 6395
Financing Kentucky One Home at a Time