source:
  type: guide
  id: fnma-sel-b7-2-04
  authority: Fannie Mae Selling Guide B7-2-04 — Special Title Insurance Coverage Considerations
  description: Fannie Mae Selling Guide B7-2-04 — Special Title Insurance Coverage
    Considerations.
  coverage_tier: operative
obligations:
- id: fnma-sel-b7-2-04-full
  canonical_id: fnma-sel-b7-2-04-full
  section: Fannie Mae Selling Guide B7-2-04 — Special Title Insurance Coverage Considerations
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B7-2-04 — Special Title Insurance Coverage
      Considerations
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B7-2-04, Special Title Insurance Coverage Considerations (05/03/2023)
      Introduction This topic provides speciﬁc requirements for title insurance coverage
      related to certain types of loan products or types of subject properties, including:
      Condo and PUD Unit Mortgages Co-op Share Loans Mortgages Subject to Leasehold
      Estates Published May 6, 2026 847 Other Mortgages Condo and PUD Unit Mortgages
      The title insurance policy for a condo or PUD unit mortgage must describe all
      components of the unit estate. For condo units, an ALTA 4 or 4.1 endorsement
      or its equivalent is required. For PUD units, an ALTA 5 or 5.1 endorsement or
      its equivalent is required. These endorsements must be attached to each policy
      or incorporated in the text of the policy. If the unit owners own the common
      areas of the project as tenants in common, the policy for each unit mortgage
      must reﬂect that ownership. If the homeowners'' association owns the common
      elements, areas, or facilities of the project separately (or holds them in a
      leasehold estate), the title insurance on those areas must insure that ownership.
      This title policy must show that title to the common elements, areas, or facilities
      is free and clear of any objectionable liens and encumbrances, including any
      statutory or mechanic''s liens for labor or materials related to improvements
      on the common areas that began before the title policy was issued. The title
      policy must protect Fannie Mae by insuring the following: that the mortgage
      is superior to any lien for unpaid common expense assessments. (In jurisdictions
      that give these assessments a limited priority over a ﬁrst mortgage, the policy
      must provide assurance that those assessments have been paid through the eﬀective
      date of the policy.) against any impairment or loss of title of Fannie Mae''s
      ﬁrst mortgage caused by any past, present, or future violations of any covenants,
      conditions, or restrictions of the master deed for the project. (It must speciﬁcally
      insure against any loss that results from a violation that existed as of the
      date of the policy.) that the unit does not encroach on another unit or on any
      of the common elements, areas, or facilities. (The policy also must insure that
      there is no encroachment on the unit by another unit or by any of the common
      elements, areas, or facilities.) that the loan is secured by a unit in a condo
      project that has been created in compliance with the applicable enabling statutes;
      that real estate taxes are assessable and lienable only against the individual
      condo unit and its undivided interest in the common elements, rather than against
      the project as a whole; and that the owner of a PUD unit is a member of the
      homeowners'' association and that the membership is transferable if the unit
      is sold. Co-op Share Loans When co-op shares are recognized as real property,
      a title policy is required. Title evidence for a co-op share loan must ensure
      that: the title is generally acceptable, the borrower has good and marketable
      title to the shares, and the co-op corporation has good and marketable title
      to the project. Published May 6, 2026 848 When co-op shares are considered personal
      property and therefore cannot be insured under standard title policies, the
      title must be generally acceptable, the borrower must have title to the shares,
      and the co-op corporation must have good and marketable title to the project.
      Mortgages Subject to Leasehold Estates A mortgage that is subject to a leasehold
      estate must have an ALTA Endorsement 13.1. For loans secured by properties held
      by a community land trust, see Title Insurance and Delivery Requirements in
      B5-5.3-03, Shared Equity Transactions: Eligibility, Underwriting and Collateral
      Requirements. Other Mortgages The table below provides the title insurance coverage
      requirements or endorsements for other types of loans. Transaction Type Title
      Insurance Requirements Conventional HomeStyle loan or FHA Section 203(k) home
      improvement loan The policy must cover the full amount of the recorded mortgage,
      must be dated concurrently with the recordation of the mortgage, and must be
      updated to the date on which renovation work is completed. ARM loan The policy
      must include ALTA Endorsement 6. Manufactured home loan The policy must include
      ALTA Endorsement 7, 7.1, or 7.2. Native American Housing Initiative loan For
      a HUD-guaranteed Section 184 mortgage, when title to the security property is
      held as a fee simple estate, Fannie Mae requires a title insurance policy that
      satisﬁes its general requirements. For all other HUD-guaranteed Section 184
      mortgages, Fannie Mae relies on the title status report issued by the Land Titles
      and Records Oﬃce of the Bureau of Indian Aﬀairs. Published May 6, 2026 849 Transaction
      Type Title Insurance Requirements Texas Section 50(a)(6) loan Fannie Mae requires
      a Mortgagee Policy of Title Insurance (Form T-2), supplemented by an Equity
      Loan Mortgage Endorsement (Form T-42) including the optional coverage provided
      by Paragraph 2(f) and a Supplemental Coverage Equity Loan Mortgage Endorsement
      (Form T-42.1). Refer to B5-4.1-03, Texas Section 50(a)(6) Loan Underwriting,
      Collateral, and Closing Considerations for more information. Conventional construction-to-permanent
      loan When closed as a single transaction for both the construction loan and
      the permanent ﬁnancing, the policy must be dated concurrently with the date
      of the mortgage and must include (1) a "pending disbursements" clause and (2)
      a ﬁnal endorsement to the title policy that extends the eﬀective date of the
      coverage to the later of the ﬁnal construction advance date or the endorsement
      date. When closed as two separate transactions (one for the construction phase
      and one for the permanent ﬁnancing), the policy must satisfy Fannie Mae''s standard
      title insurance requirements for permanent mortgages. Loans with remotely notarized
      loan documents If the notarized document is a security instrument or an amendment
      to a security instrument, the remote notarization must be disclosed to the title
      company providing title insurance coverage and either: • an aﬃrmative endorsement
      to the title insurance policy is obtained regarding Exclusion 3(b) in the standard
      ALTA terms and conditions; or • the title insurer has not taken an exception
      for the remote notarization in the title insurance policy and all related communications
      with the title insurer are kept in the loan ﬁle. Shared equity loans See Title
      Insurance and Delivery Requirements in B5-5.3-03, Shared Equity Transactions:
      Eligibility, Underwriting and Collateral Requirements for requirements related
      to loans secured by properties held by community land trusts and loans secured
      by properties with income and resale price restrictions. Published May 6, 2026
      850 Recent Related Announcements The table below provides references to recently
      issued Announcements that are related to this topic. Announcements Issue Date
      Announcement SEL-2023-04 May 03, 2023 Announcement SEL-2022-06 July 06, 2022
      Announcement SEL-2020-05 September 02, 2020 Announcement SEL-2019-01 February
      06, 2019'
  judgment: false
