You’ve discovered a condominium unit that suits you perfectly and is within your financial means. Furthermore, you’re thinking of funding the acquisition of this condo unit using a VA home loan. However, there’s an issue. The condo complex where you want to buy your unit hasn’t been evaluated or authorized by the U.S. Department of Veterans Affairs (VA), the federal agency that guarantees VA loans. What should you do next? Read on to find out everything you need to know about navigating the VA condo approval process.
VA Loan Condo Approval Requirements
The VA offers assistance to U.S. military veterans, active-duty members, and their widowed spouses to purchase their own properties, which can include condominiums, but only if they are located in complexes that have been approved by the VA. The VA places great importance on the condo complex you select because they care that these complexes have many shared areas that can impact your unit’s home value. For your condo complex to be accepted by the VA, it must meet certain requirements, which include:
- The complex must have more than a single unit.
- A minimum of 50 percent of the units must be inhabited by owners, meaning the condo cannot rent out more than half of the units.
- For recently constructed or developed condo complexes, a minimum of 75 percent of the units must be sold.
- No one entity, whether an individual, corporation, or investor, can own over 10 percent of the units in the complex.
- Below 15 percent of owners are delinquent on their Homeowners Association fees.
How to Use the Condo Report Tool for VA-Approved Complexes
Once you’ve made the decision that a condo is the perfect choice for you, the next step is to search for condo complexes in your desired location that have received approval from the VA. To determine whether a condo complex is on the VA’s list of accepted condos, you can visit the official VA Condo Report website. Simply click on the “+” sign located in the right column. If the approval status reads ‘Accepted’, then the complex has met the VA’s criteria, making it eligible for purchase using a VA loan.
What to Do If the Condo Complex Isn’t VA-Approved?
If the condo complex you’re interested in is not on the VA-sanctioned list, don’t worry. You can take certain measures to get that complex accepted. One option is to request your lender to file the necessary documents for an inquiry into the complex to determine if it satisfies the approval criteria.
After which, they will initiate discussions with either the property manager or the Homeowners Association (HOA) of the condo complex you’re interested in to gauge their willingness to go through the VA authorization process. However, the entire process can take several weeks or more to complete. Though the condo manager or HOA might agree to pursue VA authorization, there is no promise that the complex will meet the VA’s approval criteria.
It may make more sense to consider looking for a different unit in a complex that is already VA-sanctioned if the condo you’re interested in is not yet approved. Once you find a unit in an approved complex, applying for a VA loan to fund the purchase of your desired condo unit will be a straightforward process.
