A development which consists of individually owned parcels and common areas owned by an association in which home owners in the area have access to through their membership in the home owners association.If a certain percentage of properties/units are not sold or are owned by investors in a PUD the units are considered non warrantable.
This is basically a zoning designation, for a property that has more unit density, then a normal development and usually built around common open areas.
Townhomes/townhouses are typically classified as Planned Unit Development, Attached, Single Family Residences.
A mortgage lender will normally not consider a single family residence in a planned unit development to be of higher lending risk than a similar such property not under the jurisdiction of a PUD.
One exception might be a residence that is located in a PUD in which the homeowners association is in poor financial health or is the subject of pending litigation.
When thinking of purchasing a PUD always look at the title report and see how the property is titled. In some parts of the country, such as CA, some Single Family Residences are Insured as a PUD and Titled as Town homes or Condominiums. This can lead to problems with your lender.
You can run into problems getting financing on these properties if a certain number of the units have not been sold or
don't have purchase agreements.
PUD or Planned Unit Developments come in specific varieties. For example, a DeMinimus PUD is a Planned Unit Development (PUD) in which the common property has less than a 2% influence upon the value of the premises. The 2% rule of thumb is calculated by dividing the dollar amount of amenities by the total number of units.
