Construction Lender Warranty

Lenders must be aware of the exposure that comes with being the seller of a home in today’s market. It is highly likely that a lender who becomes the seller of new homes will be exposed to liability for construction defects whether or not the lender actively participated in any aspect of the construction.

Many lenders incorrectly believe that they will not have liability if they do not actually complete the construction themselves; however, adding an as-is clause will not always dismiss lenders from liability. 2-10 HBW offers the solution to limit lender liability with the 2-10 HBW Construction Lender Warranty. The Program offers great benefits including:

• Ability to transfer liability for qualifying structural defects to a financially strong warranty insurer backed by A++ reinsurers
• Compete against warranted homes
• Ability to help Realtors^® sell your homes

The full 2-10 warranty product is HUD-approved for FHA, VA and RHS financing.

Many lenders are asking about the 10-year warranty product to mitigate their exposure. While this plan does provide coverage on qualifying structural defects for your bank-owned properties, it is not a full 2-10 warranty and therefore not HUD-approved for government backed financing.

Click here for more information on Lender Liability.

Please call your local risk management specialist at (800) 488-8844 for more information.