301: Units in Condominium Projects

A condominium project is one in which individual owners hold title to units in the project along with an undivided interest in the real estate that is designated as the common area for the project.

Appraisals for condominium units that secure manually underwritten mortgages are usually documented on the Individual Condominium Unit Appraisal Report (Form 1073) or the Desktop Underwriter Quantitative Analysis Appraisal Report (Form 2055).  However, we will accept appraisals of detached condominium units on the Uniform Residential Appraisal Report (Form 1004), if the appraiser includes an adequate description of the project and information about the owners' association fees and the quality of the project maintenance.  Desktop Underwriter will specify the level of property analysis and review for Desktop Underwriter-processed mortgages that are secured by condominium units.

The appraisal of an individual unit in a condominium project requires the appraiser to analyze the condominium project as well as the individual unit.  The appraiser must pay special attention to the location of the individual unit within the project, the project's amenities, and the amount and purpose of the owners' association assessment since the marketability and value of the individual units in a project depend on the marketability and appeal of the project itself.