CAS Mortgage Insurance Primer Presentation

Overview of Property and Flood Insurance Requirements for Sellers Property Insurance Flood Insurance Borrowers have the right to select his or her own property insurance carrier, provided that the carrier meets our rating requirements. The insurance policy coverages must meet Fannie Mae's requirements. The lenders must ensure that the insurance carrier, policy, and coverage meet Fannie Mae's requirements. In some cases, Fannie Mae may require additional coverage or consider coverage that differs from these requirements. Property Insurance for properties securing loans delivered to Fannie Mae must protect against loss or damage from fire and other hazards covered by the standard extended coverage endorsement, which must include, at minimum, wind, civil commotion (including riots), smoke, hail, and damages caused by aircraft, vehicle, or explosion. The coverage must provide for claims to be paid on a replacement cost basis. Fannie Mae does NOT accept property insurance policies that limit or exclude from coverage (in whole or in part) windstorm, hurricane, hail damages, or any other perils that normally are included under an extended coverage endorsement. The lender must ensure that any flood insurance required for the security property is in place. Fannie Mae requires flood insurance for any property that has a residential building, dwelling, structure, or improvement situated in a Special Flood Hazard Area (SFHA) that • has federally mandated flood insurance purchase requirements, or is located in the Coastal Barrier Resources System or Otherwise Protected Area. Flood insurance should be in the form of the standard policy issued under the NFIP or by a private insurer. The terms and conditions of the flood insurance coverage must be at least equivalent to the terms and conditions of coverage provided under the standard policy of the NFIP for the appropriate property type. CAS Mortgage Insurance Primer Presentation 10/18/2017 © 2017 Fannie Mae. Trademarks of Fannie Mae. 12

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