Buying a condominium with you VA home loan benefit is a great option. However, there are additional requirements that differ from purchasing a single-family residence or a multiunit complex.
Borrowers can use their VA home loan benefits to purchase a condominium. But some additional requirements differ from buying a single-family residence or a multiunit property.
The VA must approve a condo complex in order for a borrower to purchase a unit. Hundreds upon hundreds of condo developments across the country are already on the approved list.
You can check the VA's condo database online to see if the unit you want to purchase is in an approved development.
What happens if the condo you hope to purchase isn't in a VA-approved development? There are specific steps you can take to receive approval. Some important facts to understand going into the process are:
Borrowers can ask their lender to seek approval from the VA for the condo development they want. The lender will need to make a written request for approval and include a copy of the condo's organizational documents.
These can include:
It's important to note that condo developments are under no obligation to provide this documentation.
The VA doesn't publish their guidelines on condo approval conditions. Lenders may also have their own requirements on top of what the VA wants to see.
Generally, here are a few possible considerations:
Talk with a Veterans United loan specialist for more details.
VA officials will review the request and paperwork and either approve or deny the development's eligibility or alert the lender regarding missing documents or other issues that can be addressed and resubmitted.
It's important to know going in that this process can sometimes take months. Lenders won't be able to order an appraisal on the property until approval is granted. Don't expect to rush through the condo approval process if you need a quick closing.
The VA also encourages lenders to include an attorney's opinion letter stating the condo development meets VA requirements.
The VA will want to ensure the condo development doesn't put any undue burden or restrictions on veterans or lenders. One example is if the development has rules that prevent foreclosure or resale of property without approval from the homeowners association. Deed restrictions like that will typically be a problem.
Communities with age restrictions can also be challenging. With something like an "Over 55" development, for example, lenders and the VA will need to take a closer look at the community's organization documents. Lenders want to ensure these communities are compliant with fair housing and lending laws and don't impact the property's future marketability.
Unit occupancy can also come under scrutiny. When a development is first under consideration for approval, lenders may require that a certain percentage of the condo units are either sold or under contract.
The same can hold true for developments that have already been approved by other government agencies.
Talk with a Veterans United loan officer at 855-259-6455 if you have questions about buying a condo with your hard-earned VA loan benefits.
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