Pentagon Federal Credit Union penfed Lender changes mortgage insurance requirements Alexandria Virginia

My question is

if underwriting approved my loan 2 mo ago why are they coming back to me with a higher amount of required coverage if all else remained identical. If i hadn't reached out to them everyone would have remained the same. Now because of this my costs are going to increase by a grand EACH year due to increased insurance premiums.

 The insurance for under HOA's are what are usually considered "Master Policies".  That is they cover basically the Struture and outside.  They RARELY if ever cover interior spaces or personal property.

The reason for this is basically simple.  There is no guarantee how much value a person may have in their home.  You may have one unit with a 40,000 Kitchen Remodel and new cabinets, and a new $5,000 entertainment system.  While next door you may have someone who has the original kitchen and a 13" TV.  Obviously the first unit needs a lot more insurance than the other.  For this reason it is impractical(and could be costly) for the HOA to have to maintain the appropriate amount for each individual unit.  

Now, there is a lot more to this but that is the basics as to why you still need to carry it.  It is also why there isn't a single lender that I have ever seen that doesn't require a person to purchase h*o-6 insurance.

But if you are still convinced that the HOA master policy covers what the h*o-6 covers you need to get a copy of it from your HOA.  When you read over the policy look for things such as what it covers.  If it says it covers interior spaces, personal property.  Then also look at coverage amounts.  If the "value" of the inside is $200,000 what is the cap of the Master Policy.  If it is only $10,000...you are short $190,000 and need to purchase additional insurance to cover it.  If it is what you say then you need to point this out to your Mortgage company. 

You will need to get a complete copy of your condo docs and a copy of the master insurance policy from your condo.

If you read the docs and compare to the master insurance policy you will see exactly what is covered. Most of the time (never seen an exception) the condo insurance policy only covers the exterior up to the drywall on the interior of your walls. There is a very specific definition of where the line is drawn when it gets to the owners unit.  In every condo I have seen and read the docs, the owners interior is not covered by the master insurance policy. By interior, I mean from the drywall of your unit inward.

The HO6 coverage at 100% would be for the areas that are covered, not that the condo is paying for the interior of your unit.

There have been recent significant changes to the flood policies and flood maps throughout the US taking effect this year, 2014. What has changed is that many more areas are flood areas and premiums are much more expensive. You can read all about it on the FEMA website and check the new maps.

I am not defending PenFed. I don't work for them or any other lender. I am a Realtor that is familiar with these changes as it is effecting my area tremendously. We are even having community meetings with FEMA to discuss the huge impact these new flood maps and new costs for coverage.

The only way to know for sure how it effects your specific unit is to read through all those boring documents for the condo and the master insurance policy so you can see exactly where the condo coverage stops and yours begins. Good luck.