Can you use a VA home loan to buy a condominium?
Yes, VA borrowers can use a VA loan to purchase VA approved condos, as long as both the borrower and the condominium itself meet the eligibility requirements set by the Department of Veterans Affairs.
In this article (Skip to...)
- What is a VA-approved condo?
- VA condo approval requirements
- Navigating the list of VA-approved condos
- Types of VA condo approval
- Common reasons a condo may not have VA approval status
- What to consider when shopping for a condo
- How to purchase a condo with a VA loan
- VA-approved condo FAQs
- Is a VA-financed condo right for you?
What is a VA-approved condo?
A VA-approved condo is a condominium complex that has applied for — and received — VA approval, meaning the complex has completed the paperwork and process necessary to demonstrate it meets the
VA requirements and its units are eligible for VA financing.
VA condo approval requirements 2024
To qualify for VA approval, the condo development must meet the following requirements:
- More than 50 percent of units are owner-occupied
- Less than 15 percent of unit owners are behind on their Home Ownership Association (HOA) fees
- For newly constructed condo projects, or recently converted apartment buildings, at least 75 percent of the units must be sold
- The complex must consist of more than one unit
- No single entity (individual, investor, or company) may own more than 10 percent of the units
Navigating the list of VA-approved condos
Many condo complexes have already been designated as approved for VA financing.
The VA website offers a condo report, indicating the status of various complexes. You can sort by approved complexes in your area, or look up the status of a particular complex by searching the condo name.
Types of VA condo approval
- Accepted without conditions. This approval status indicates that the condo is eligible for a VA loan.
- Accepted with conditions. Typically, this indicates that the condo is approved but the VA has flagged concerns about at least one aspect of the complex. For example, the complex will meet all the VA requirements except for occupancy and therefore be eligible for conditional approval. While this will not prevent you from getting a VA condo loan, you may need to fill out additional forms to indicate you understand the complications and wish to proceed anyway.
- HUD accepted. Historically, the VA-approved condo complexes are already FHA-approved by the Department of Housing and Urban Development (HUD). While this is unlikely to apply to newer complexes, as the government agency has changed its policy, any condos approved by HUD before December 2009 are likely to qualify for a VA loan with this approval designation.
Unaccepted
What does it mean?
If a condo is designated as “unaccepted,” it means one of two things:
- The condo complex has applied for VA approval and been denied.
- The condo complex has never applied for VA approval.
What to do?
If you fall in love with a condo complex that is not on the VA-approved list, you can ask your lender to file an inquiry with the property.
If the complex has simply never gone through the VA approval process, you may be able to request that they do so. However, the process can take a long time and there is no guarantee the complex will qualify.
If the complex has already been denied for VA approval, you will need to look for another home or consider alternative types of financing.
Common reasons a condo may not have VA approval status
- The condo complex has not applied to the VA. Many condo associations simply have not yet applied for VA approval.
- The complex does not meet VA standards. Some condo complexes will simply fall short of the VA requirements. It is possible that this could point to problems with the development’s living conditions or ownership rights, in which case you may not want to proceed with the purchase anyway.
- The complex rules are too restrictive. If the condo homeowner association has particularly restrictive bylaws, the condo may not qualify for VA approval. For example, if the condo association prohibits owners from leasing out an apartment, the VA won’t approve it, as they want active-duty service members to be able to rent their homes while deployed.
What to consider when shopping for a condo
Condos offer a number of advantages over a single-family home but they also have some tradeoffs.
When you’re deciding whether a condo is the right new home you should consider:
- Condo expenses. While the median sales price tends to be lower, many condos feature ongoing costs such as HOA fees.
- Condo maintenance. Compared to a house, condos can be much easier to maintain, as the HOA will typically handle landscaping and building maintenance.
- Available space. Condo units will generally offer less space than a traditional house. That means less square footage for living but also less space between neighbors and limited storage space, if any.
- Condo amenities. Many complexes offer amenities, including gyms, pools, saunas, barbecues, and common areas. These can be wonderful benefits but will also mean proportional HOA fees.
- Community rules. Most condo boards have guidelines for the community, which can be a good or bad thing, depending on your lifestyle and needs. It’s good to review those rules in advance to confirm that the community is a good fit.
- Condo security. For homebuyers concerned about feeling safe, condo complexes typically offer secure premises, sometimes including gates, security guards, and cameras.
How to purchase a condo with a VA loan
The process of buying a condo using a VA mortgage is very similar to the process of buying a single-family home.
Here are the steps you’ll need to take.
- Find a VA-approved condo development. Use the VA website, or work with a real estate agent, to locate a VA-eligible condo complex.
- Shop around for the right VA lender. It’s best to compare offers from 3-5 different lenders to make sure you’re getting the best deal possible.
- Get your VA loan pre-approval. Your lender will review your finances, including your credit score and debt-to-income (DTI) ratio, to determine the loan amount you are eligible for.
- Make an offer.
- Finalize your VA loan application. Your lender will review your financial documents during the underwriting process and close your home loan.
VA-approved condos FAQ
Can I use a VA loan to buy a townhome?
Yes, as with a condo, a VA loan can be used to purchase a townhouse, provided it is within a VA-approved complex.
How do I find out if a condo is VA-approved?
The best way to determine whether a complex is VA-approved is to review the database
Is there a VA-approved condo list?
Yes, the VA maintains a database on its website to indicate approved condo complexes.
What is the VA condo approval process?
A condo complex’s board can apply for VA approval by submitting documentation about its finances and bylaws. An individual cannot apply.
How much does it cost to get a condo VA-approved?
There is no cost to the homebuyer when getting a condo approved by the VA.
Does the VA allow condo spot approval?
No, unlike the FHA, the VA will not allow for individual condo units to be approved within a non-approved condo complex. To be eligible for a VA loan, the entire complex will need VA approval.
Why would a condo not be VA-approved?
A condo may not be eligible for VA financing for a number of reasons, including too few owner-occupied units or too many owners behind on their HOA fees.
Do VA IRRRLs require condo approval?
To be eligible for a VA Interest Rate Reduction Refinance Loan, the borrower must already have a VA loan on the property, which means the condo must have previously been designated as VA-approved.
Is a VA-financed condo right for you?
Whether or not obtaining VA financing to purchase a condo is the right decision for you will depend on your unique financial situation and your homeownership goals.
However, the VA loan program offers significant benefits and is often a great option for VA-eligible borrowers. The cost-saving benefits of the VA program include:
- No down payment requirement
- Competitive interest rates
- No private mortgage insurance (PMI)
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