HO6 Fannie Mae's Rule?

[iiinycboi]

So yeah i am confused about the HO6 rule...

So all refinance and new purchase requires a 20% HO6 coverage?

Is this dwelling coverage or personal property? for the "unit"

 

[djs]

Fannie Mae is confused about their own rule and I haven't been able to find any guidance on this at all, outside of what the escrow officer wants to get the loan to close.

Supposedly its to help offset coverage for 'walls-in', meaning it should be building coverage. Problem is, some HOA policies are actually walls-in already, so it becomes somewhat duplicate coverage.

I just tell my insureds to add it on, get the loan closed and then if they don't want the coverage we can discuss taking it back off. Just get the loan closed FIRST. Don't stop the process.

Of course, I do recommend they keep the coverage and explain that it is a valuable thing to have if something should happen to the unit, especially if they have done any work on the place at all.

Dan

 

[iiinycboi]

yeah, the mortgagee didnt give any requirements, they just say make us AI on HO6.

so i should just go aghead and make their dwelling 20% of their value or upgrades/alterations

 

[Hefe]

As djs said, just set the limit to at least what escrow requires and figure out later what they really need.

I've even had some escrow companies require dwelling + contents to equal 20% of the appraised value which makes no sense at all.

 

[djs]

The thing is, they don't know. They just know 20%. I explain to the insured that my goal is to not be the obstacle to them getting a loan. Make it happen first, straighten it out later.

Dan