Lenders Have New Requirements for Condo Insurance Coverage

Freddie Mac, Fannie Mae and FHA all have new requirements regarding HOA condo insurance coverage that must be carried by condo owners. Under the new lending guidelines, the lenders are now requiring owners of condominiums to obtain “HO-6” policies.A “HO-6” policy is like a regular homeowner’s policy, but for a condominium unit, and with a lot more extra items covered. HO-6 insurance polices cover the interior of the unit and personal property inside the unit. In most cases, the master insurance policy obtained by the association covers the association’s common areas such as the hallways, roof, basement, elevator, boiler, and common walkways, for both liability and physical damage–but not the inside of units including an owner’s furniture, appliances, etc. HO-6 policy benefits generally include the following items: