Mortgage Loan Property Type OverviewA mortgage loan's property type is a predefined property type description indicating characteristics of the property secured by the mortgage loan. The loan's property type, in conjunction with other risk factors, serves as one of the indicators of a loan's likelihood for profitable servicing. In the interest of mitigating portfolio risk, investors perform analysis to determine the distribution of occupancy and property usage types for loans in their servicing portfolio.
Property type descriptions may vary by investor in their marketing materials; however, to ensure loan quality and marketability, investors require their sellers and underwriters to document loan property types in accordance with mortgage industry standards. The Mortgage Industry Standards Maintenance Organization, Inc. (MISMO) electronic mortgage application and underwriting specifications provide for use of the following Government Sponsored Enterprise (GSE) property types.
AttachedA property type of "Attached" indicates that the primary dwelling for a single family home has at least one shared wall with the primary dwelling of another single family home. The following property type descriptions are commonly used to in the mortgage industry describe attached property types:
- Semi-Detached is sometimes used to describe a
situation where there are only two houses and they are sharing a
common single wall. For GSE reporting purposes these are still
- Town House or Terrace Home is sometimes used to described houses linked together in a daisy chain. Once again, for GSE reporting purposes these property types are still considered "Attached".
CondominiumA property type of "Condominium" indicates that portions of the property are commonly owned and other portions are individually owned. The term "Condominium" is more a reference to the method of ownership than the type of building. The most common arrangement for condominiums are units in a multi-unit dwelling. Each unit is individually owned and the common areas such as hallways and elevators are jointly owned by all of the unit holders.
High-rise CondominiumA property type of "High-rise Condominium" indicates that the individually owned unit is located in a multi-unit dwelling that has a building structure with more than six stories and is equipped with elevators. See Condominium .
CooperativeA property type of "Cooperative" indicates that the building has an associated legal entity or company in which ownership of shares allows an individual the rights to a lease for residence of a unit in the building. A cooperative is also known as a "company share" or "co-op".
DetachedA property type of "Detached" indicates that the primary dwelling for a single family home does not share a wall with the primary dwelling another single family home.
Detached CondominiumA property type of "Detached Condominium" indicates that the property is a single family home in which the homeowner does not maintain the exteriors of the dwellings to include the yard. See Detached and Condominium for additional information.
Manufactured HousingA property type of "Manufactured Housing" indicates Housing, such as mobile homes, that is primarily constructed in a plant or factory prior to transporting it to the lot as a completed unit or as a number of complete sections or rooms which can be joined on-site with a minimum of effort. This property type is also commonly to as a "Prefabricated" home in the mortgage lending industry.
Manufactured Housing Single WideA property type of "Manufactured Housing Single Wide" indicates that the manufactured home is sixteen feet or less in width and can be towed to its lot as a single unit. See Manufactured Housing
Manufactured Housing Double WideA property type of "Manufactured Housing Double Wide" indicates that the manufactured home is twenty feet or more in width and is towed to its lot in two separate units that are then joined together. See Manufactured Housing.
Manufactured Housing Multi WideA property type of "Manufactured Housing Multi Wide" indicates manufactured housing that is transported to its lot in more than two units. See Manufactured Housing.
Manufactured Home CondominiumSee Manufactured Housing and See Condominium.
ModularA property type of "Modular" indicates that the home is built in sections in a factory setting. Finished modules are then transported to the home site and placed on a pre-made foundation, joined, and completed by a builder. A modular home conforms to the building codes that are required at the specific location it will be delivered to.
Planned Unit Development (PUD)A property type of "Planned Unit Development (PUD)" indicates that the home is located in an area of land developed in accordance with a plan approved by the local government. It is this idea of an approved plan that makes the PUD desirable. Rather than placing businesses or houses on a site, the developer must come present the local government with a plan describing how the elements of the site will fit together and fit into the surroundings.
The "Reporting Mortgage Loan Property Types" section of this article details steps for creating a report that an investor may use to track and report the distribution of loan property types for loans that a seller has delivered to the investor. The Sample Mortgage Loan Property Type Report in this article can be used as a model for stand alone report or incorporated into a comprehensive Seller Scorecard report.
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