Condo Fidelity Crime Insurance Requirements
Condo Fidelity crime insurance is required for all condo and co-op projects, with the following exceptions that do not require fidelity crime insurance
- Condo projects reviewed under the Limited Review method,
- Condo or co-op projects consisting of 20 units or less, or
- Condo or co-op projects that would need fidelity/crime insurance coverage of $5,000 or less (based on the calculations described in the Amount of Coverage below).
Note: In states that have statutory fidelity/crime insurance requirements, Fannie Mae accepts those requirements in place of its own.
Requirements for Who Must Be Covered
The HOA or co-op corporation must have blanket fidelity/crime insurance coverage for anyone who either handles or is responsible for funds that it holds or administers, whether or not that individual receives compensation for services, including coverage for a management agent. The insurance policy must name the HOA or co-op corporation as the insured and the premiums should be paid as a common expense by the association or corporation.
A management agent that handles funds for the HOA or co-op corporation should additionally be covered by its own fidelity/crime insurance policy.
Amount of Coverage
The HOA or co-op corporation policy must cover the maximum funds that are in the custody of the HOA or co-op corporation or its management agent at any time while the policy is in force. Fidelity/crime insurance is not required if the maximum estimated funds are less than or equal to $5,000.
A lesser amount of coverage is acceptable if the project’s legal documents require, or another source acceptable to the lender verifies, that the HOA or co-op corporation and any management company adheres to one or more of the following financial controls:
- Separate bank accounts are maintained for the working account and the reserve account, each with appropriate access controls, and the bank in which funds are deposited sends copies of the monthly bank statements directly to the HOA or co-op corporation.
- The management company maintains separate records and bank accounts for each HOA or co-op corporation that uses its services, and the management company does not have the authority to draw checks on, or transfer funds from, the reserve account of the HOA or co-op corporation.
- Two members of the Board of Directors must sign any checks written on the reserve account.
Even then, the fidelity/crime insurance coverage must equal at least the sum of three months of assessments on all units in the project, unless this calculated amount is less than or equal to $5,000, in which case fidelity/crime insurance is not required.
Cancellation/Modification Requirements
The fidelity/crime insurance policy for a condo or co-op project must include a provision that calls for at least ten days’ written notice to the HOA, co-op corporation, or insurance trustee before the policy can be canceled or substantially modified for any reason.
Has Your Condo Loan Application Been Turned Down or Your Concerned You May Not Qualify for a Jumbo Loan Because?
- Don’t have enough Credit Report tradelines.
- First time home buyer.
- Credit Scores are a little Too Low, not to worry we can do a Rapid Rescore.
- Prior Foreclosure or Bankruptcy or Loan Modifications.
- Prior Mortgage Late Payments.
- Don’t have Enough Reserves.
- Debt to Income Ratio is too High.
- Jumbo Mortgage Rates are too High.
Not to worry our Loan Officers overcome these problems all the time, we know the Florida Mortgage Business and can Close Easy, Complex and Tough Deals. We do this by utilizing our “Outside The Box Thinking” to get you pre-qualified for the maximum loan amount possible while keeping your down payment and closing costs as low as possible. Don’t just take our word for it, read our prior client reviews!