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What is a VA Approved Condo? And why do you need to know what a VA approved condo is? If you are a Veteran planning to purchase a condo using your eligibility for a VA loan, then you need to know what a VA approved condo is and how to distinguish what is VA approved and what is not approved. First, let’s start with a few basics.

What is a Condo?

va home buyerA condo, or condominium, is a building or community of buildings where the units are owned by individuals, but the land and common areas are owned jointly with all owners. You can not always tell from the outside whether a property is a condo or other type of property. Most condos are attached to other units, but many newer home projects in California are built as condo’s even if they look like single-family detached homes. And some attached homes that look like condos are actually single family homes. If you are using a VA loan to buy your next property, there are no restrictions if the property is legally a single family home. But if the property is legally a condo, detached or not, the condo project needs to be approved by VA.

Why Does the Condo Project Need to be Approved?

Why does a Condo need to be VA approved? VA wants to make sure a Veteran using the VA loan program is making a safe investment. Not all condo projects are VA approved. Some are in disrepair or have severe budget issues that will eventually result in all condo owners to pay higher HOA dues or pay a large assessment. As a VA loan home buyer, you won’t necessarily know if a condo project has plumbing or roofing issues. Hopefully, the HOA maintains the property and has regular termite inspections, etc. And hopefully, the HOA maintains sufficient funds in its reserves to cover anticipated and unexpected expenses in the future. Can you imagine if you were to buy a condo and 12 months later find out the HOA did not have reserves to cover new roofing, plumbing, or termite damage? In extreme situations, homeowners have been assessed $10,000 to $20,000 each to cover needed repairs. That would not be a fun surprise. Also, what if you bought a condo only to find out later that 75% of the units were rented out. Condo projects with high rental percentages tend not to hold value as much as a condo project with high owner occupancy rates.

why does condo need to be approvedTo help to protect Veterans from buying into a condo project that may not be a good investment, VA has requirements that must be met. VA reviews the HOA’s CC&R’s (Declaration of Covenants, conditions, and restrictions), the Bylaws, the Budget, current financials, Minutes of the most recent HOA meetings, special assessments, and litigation statements. Through this review process, VA is able to determine whether a condo project is safe VA financing.

Who Gets the Condo Project VA Approved?

Anyone can start the condo project approval process. But in many cases, the builder will get the condo project approved. For established condo projects that are not VA approved, the HOA can submit a package to VA. Sometimes a Realtor or a VA Lender will prepare and submit a package. The process for getting a project approved requires some assistance from the HOA since much of the documentation will be provided by the HOA. The VA condo project approval process can take anywhere from 2 or 3 weeks to 2 or 3 months depending on the completeness of the package and the approvability of the project. In most cases, a Veteran planning to use a VA loan to purchase a condo will need to restrict their house hunting to just those condos that are in VA approved condo projects. But how do you find VA approved condo projects?

How to Find VA Approved Condos

You would think there would be an easy way. Unfortunately, it’s not always that easy to find VA approved condos. The VA Lookup Site is the best way to verify if a condo is approved, but in many cases the condo are not listed by name on the VA Lookup site. Depending on when the project was first approved, it may be listed based on the Legal Tax Tract code. This means you’ll need to figure out the Tract Code for the condos you are looking at. This is where it is important to be working with a VA Loan Specialist who can help determine which condo project are VA approved and which are not.

Below is a video that will walk you through how to use the VA Lookup site.

Easy Way to Find VA Approved Condos

The easiest way for a Veteran to find VA approved condo’s for sale is to work with real estate professionals with experience in VA lending. In some counties local real estate professionals who specialize in VA financing have built specialized home search websites specifically to help Veterans find VA approved condos. In Orange County, www.OrangeCountyVeteransHomes.com makes it very easy to find VA approved condos for sale. From the home page, a Veteran can simply click on the city they are interested in and see results immediately for VA approved condos for sale within that city. It doesn’t get much easier than that.

Get PreApproved for a VA Loan at the Beginning of the Condo Hunt

Just like it helps to know how much payment you can afford before shopping for a car, you should know how much of a mortgage payment you can afford before you start looking at homes. Figure out what your budget it. be realistic. You will need to talk to a Loan Officer who specializes in the VA loan program. The VA Loan Officer will provide custom VA loan scenarios with a complete breakdown of the mortgage payment, including property taxes and insurance. The loan officer can also retrieve your Certificate of Eligibility and get you PreApproved, which must be completed before you make an offer on a home.

Authored by Tim Storm, an Orange County VA Loan Officer specializing in VA Loan. MLO 223456. – Please contact my office at the Home Point Financial. My direct line is 949-640-3102. I will prepare custom VA loan scenarios which will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process