Insurance

Find our insurance requirements below.

GENERAL Requirements

Named Insured: Must be the borrower (i.e. if a business entity, then the legal name of the company).

Premises: Must reference the subject property for loan.

Policy Period: Must be at least 12 months.

Coverage Type: Must cover fire and extended perils and such other hazards as are customary in the area, including flood coverage if any portion of the property is in an area identified by any federal governmental authority as having special flood hazards.

Coverage Amount: Hazard insurance must be equal to or greater than the loan amount unless otherwise agreed to. Flood insurance, if applicable, must be the lessor of 1) the loan amount, and 2) the maximum amount available through National Flood Insurance Program (NFIP).

Premium Payment: Provide receipt (of 12 month premium payment) or invoice (of 12 month premium to be collected and paid at closing).

Additional Interest:  Must indicate both mortgagee and loss payee. Contact us for proper language.

ADDITIONAL Requirements FOR REHAB/GUC LOANS

AM Best Rating: A minimum

AM Best Size: VIII minimum

Coverage Type: Property insurance must be Dwelling Fire (“Special Form”) OR Commercial Property (“Basic” or “Special Form”). Liability insurance is also required and must be on an Occurrence (not Claims-Made) basis for covered losses. Must include builders risk coverage, including the existing structure and all improvements. No windstorm/hail exclusion. No named storm exclusion. 30 days notice of cancellation must apply and be evidenced.

Coverage Amount: Liability insurance must cover a minimum of $1M for each occurrence and $2M in aggregate.

Deductible: $5K max for property/hazard/flood insurance. $1K max for liability insurance.

ADDITIONAL Requirements FOR rental LOANS

AM Best Rating: B minimum

AM Best Size: N/A

Coverage Type: Must include rent loss insurance covering a minimum of 6 months of PITIA (principal, interest, taxes, insurance and association dues, if applicable). The coverage must provide for claims to be settled on a replacement cost basis.

Policy Period: Coverage cannot expire within 60 days of the closing date and must be effective for at least one year.

Deductible: Not to exceed 5% of the loan amount.

Attached Condos: Must have HOA master property insurance policy providing coverage for the full insurable replacement cost of the project improvements including the units. If the HOA master policy does not cover the interior “walls-in” and “betterments and improvements,” must also have an HO6 Policy equal to no less than 20% of the appraised as-is value.