Is a condo association required to have an RCBAP? The Guidelines do not expressly state that it is required...only refers to fidicuary responsibility to protect the common property. There is one example provided for loss assessment coverage that refers to when there is no RCBAP but that is all I can find.

Would having a dwelling policy only cover the bank with regard to compliance?

Are there other considerations I should think about?

No, there is no requirement that they have one. Unless the individual dwelling policy totally covered the bank and the condo, I would pass on the loan as the place will never be rebuilt. If the condo association is that inept, what other problems might there be with this property?????

I agree with Randy's thoughts on this.

Interestingly, I wonder how "gap" or co-insurance penalty would work on a situation like that considering the dwelling policy won't pick up coverage for the gap.

I've never really thought about this, but it makes me wonder!

I thought the same thing RRJ.

I'm curious if the NFIP would issue a standard policy (unit coverage) when there is no RCBAP in place. As you mention the standard policy will not cover the GAP, but if no RCBAP is in place then does the GAP apply since there is no policy to have a claim filed against by the association?

I've been wondering the same thing, Dan! If there isn't an RCBAB, then co-insurance language doesn't exist. If you could obtain a policy to cover the loan with the loss payee as the bank (instead of the COA), then you might be okay.