Fannie Mae Selling Guide B7-3-04 — Individual Property Insurance Requirements for a Unit in a Project Development

Fannie Mae Selling Guide B7-3-04 — Individual Property Insurance Requirements for a Unit in a Project Development

B7-3-04, Individual Property Insurance Requirements for a Unit in a Project Development (12/14/2022) Introduction This topic contains information on property insurance requirements for units in project developments, including: Overview Determining if an Individual Property Insurance Policy on a Unit in a Project Development is Required Coverage Requirements Determining the Required Coverage Amount Deductible Requirements Overview See Overview in B7-3-03, Master Property Insurance Requirements for Project Developments for additional information. Determining if an Individual Property Insurance Policy on a Unit in a Project Development is Required See Determining if a Master Property Insurance Policy is Required in B7-3-03, Master Property Insurance Requirements for Project Developments for determining when a master property insurance policy and/or an individual property insurance policy is required. Published May 6, 2026 869 Coverage Requirements See Coverage Requirements in B7-3-02, Property Insurance Requirements for One-to Four-Unit Properties, for the coverage requirements when an individual property insurance policy is required for a unit in a project development. See B7-3-08, Mortgagee Clause, Named Insured, and Notice of Cancellation Requirements for requirements applicable to a loan secured by a unit in a project development. Determining the Required Coverage Amount To the extent the master property insurance policy does not cover the interior or improvements of a unit in a project development, the borrower must maintain an individual property insurance policy. The lender or servicer must verify the coverage amount is sufficient to restore the unit to its condition prior to a loss event. Coverage sufficiency should be based on the best information known or available to the lender or servicer, which may include information obtained from the borrower, in collaboration with the insurer, the HOA or co-op corporation legal documents, or other professional with appropriate resources to make such a determination. Fannie Mae recommends that lenders and servicers encourage borrowers to closely collaborate with an insurance professional to determine their individual insurance needs. Deductible Requirements See Deductible Requirements in B7-3-02, Property Insurance Requirements for One-to Four-Unit Properties for deductible requirements when an individual property insurance policy is required for a unit in a project development. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2022-10 December 14, 2022 Announcement SEL-2021-11 December 15, 2021 Published May 6, 2026 870

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