Escrow & TitleIntermediateDelaware Exam

What is a 'condominium rider' or 'PUD rider' in a Delaware mortgage?

ASimply a minor addition to the promissory note that only adjusts the interest rate specifically for condo units, which is broadly consistent with standard practice statewide

BAn addendum to a Fannie Mae/Freddie Mac mortgage that modifies standard mortgage terms to account for condominium or planned unit development ownership characteristicsCorrect

CA rider limiting the property to residential use only

DA provision in the deed restricting condo unit resale

Why An addendum to a Fannie Mae/Freddie Mac mortgage that modifies standard mortgage terms to account for condominium or planned unit development ownership characteristics Is Correct

Answer B: An addendum to a Fannie Mae/Freddie Mac mortgage that modifies standard mortgage terms to account for condominium or planned unit development ownership characteristics

A condominium rider (or PUD rider) is a Fannie Mae/Freddie Mac form attached to the mortgage instrument, incorporating specific provisions applicable to condominium ownership (like HOA assessment obligations and shared property rights) into the borrower's mortgage obligations.

Exam Tip: Escrow & Title

Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.

Key Escrow & Title Terms in This Question

Promissory Note

A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

People Also Study

Key Terms to Know

Promissory Note

A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.

Deed

A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

Adjustable-Rate Mortgage (ARM)

A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.