HOI Documents Needed for Condominiums
Understanding Lenders’ HOI Requirements
If you are purchasing a condo, you will need to obtain a specific type of Homeowner's Insurance, and we will need to obtain extra HOI documents from the condo association.
Most condo associations are covered by a Master Insurance policy, which combined with your own "walls-in" insurance will cover the full unit. In addition to finalizing your own HOI policy (the walls-in HOI for condos is called HO-6), we will need to verify that the condo association has the right Master's Insurance.
What do we need?
- Declaration Page or Evidence of Insurance for your HO-6 Walls-In Policy: This is the evidence of a finalized policy and includes a policy number. HO6 Walls-In Policies insure the entire inside of the unit, including appliances and fixtures, and are specifically designed for condos. Lenders require that the finalized Declaration Page of your policy include:
- The same insured address as is listed on your loan, including the unit of your condo
- An effective date on or before your closing date
- Your, and/or your co-borrower’s, name(s)
- Lender’s Loss Payee Clause, found on Selecting an HOI Provider or provided to the insurance company by Morty
- Your loan number, found on your loan estimate or provided to the insurance company by Morty
- Invoice or Paid Receipt for HO-6: Most borrowers choose to escrow their first year of homeowners insurance. The lender needs the invoice in order to pay for the policy. If a borrower chooses to pay up front, we will need the receipt to confirm payment.
- Condo Master Insurance: This is the insurance policy for the condominium. The insured address should be the same as is listed on your loan. Once uploaded to your Closing Tracker, we will add your name, loan number, and Lender Loss Payee Clause to the policy
Where can I find it?
- Declaration Page: Insurance agents will provide you with the declaration page once you have requested to finalize the policy. Morty will request the lender’s loss payee clause and your loan number be added to the policy, once we receive the declaration page.
- Invoice: Morty will request this, once the policy is finalized.
- Condo Master Policy: Morty will contact your condo association for this policy.
Why do we need this?
- Lenders require borrowers to have an active HOI policy for all purchase transactions to be in place in order to close on and finalize a mortgage loan. Because the lender is securitizing the loan they offer with the home itself (in the event a borrower stops paying their mortgage payments, the lender/bank can take control of the property itself to recoup the loan they provided), they naturally want to insure the value of the property from potential damages.
- Quotes Instead of Policies: In the case of most insurance agencies, the borrower is required to finalize the policy. We cannot add lender or loan information to a quote and will have to ask the borrower to go back to the insurance agent and finalize the policy.
- Policies Other than HO-6 Walls-In: All lenders require condo buyers to obtain HO6 Walls-In policies to finalize a mortgage, so make sure you let your HOI agent know that you are purchasing a condo unit.