Getting VA Loan Approval For A Condo: Process And FAQs

You're ready to make an offer on a condo that's a perfect fit for you and your budget. And you'd like to finance the purchase of this condo with a VA loan. The problem? The condo building in which you want to buy hasn't been reviewed or approved by the U.S. Department of Veterans Affairs, the government agency that insures VA loans.

What now? First, don't panic. Even if your condo unit is in a building that is not yet on the VA-approved condo list, there are steps you can take – or the condo building’s homeowners association can take – to get that building approved. And once you do, you can apply for a VA loan to finance the purchase of that condominium unit.

This is good news: A VA loan, which is available to active-duty service members and veterans of the U.S. military and their widowed spouses, is one of the most attractive loan products. That's because VA loans require no down payments. This can save you plenty of upfront money when applying for a loan.

The VA-Approved Condo List

The biggest challenge in using a VA loan to buy a condo is that the U.S. Department of Veterans Affairs must approve all condo buildings, making sure that they meet basic quality standards. The goal is to protect veterans from buying into unsafe or financially unsound condo buildings.

And if the building into which you want to buy isn’t on this list, you’ll have to take steps to change that.

Finding A Condo On The VA-Approved Condo List

If you’re an eligible veteran or active-duty service member and interested in purchasing a condominium unit, or refinancing one you already own, the first step to qualifying for a VA loan is to investigate the VA-approved condo project list to make sure the building in which you want to live is on the list.

Once you log onto the page, search for the state in which you are buying and look for the condo building you’re interested in on that list. If you can locate your project on the list and its status reads “Accepted Without Conditions,” you’re clear to apply for VA lending on the project.

If you are able to find your project, but the status of the project is listed as something else, like “Accepted With Conditions,” “HUD Accepted,” or “Rejected,” you should reach out to your local VA Regional Loan Center (RLC) to learn about the next step.

And if your building isn't on the list at all, it's time to take action to spur the Department of Veterans Affairs to consider the condo property.

The VA Condo Approval Process

There is a process to get a condo building onto the VA-approved condo list. If the condo building in which you want to buy isn’t on the VA-approved condo list, or is listed as “rejected,” there is a process to get it approved.

If the building has been rejected or approved with conditions: If your condo building has been rejected by the VA or approved but with conditions, moving the building to “approved” status might be simple.

Sometimes, the staff at your local VA Regional Loan Center simply needs to update the condo building listing. Other times, the Department of Veterans Affairs might request additional information from the board running the condo building, such as a list of officers, a copy of condo bylaws or documents proving that the building has a large enough reserve fund of cash to cover maintenance or future repairs.

The condo board might need to resolve more serious issues to move a building from “rejected” by the VA to “approved.” The condo building’s homeowners association might have to change a section of their governing documents, build their cash reserves or eliminate resale restrictions on units. In other cases, they might have to pay for significant improvements to the building’s foundation, roof or other areas.

If the status of the building on the VA-approved condo list is anything other than “Accepted without conditions,” reach out to your local Regional Loan Center and ask a representative what steps need to happen to move the building to “Approved” status.

If your building is not on the approved condo list: If your condo project is not on the VA’s list of approved condo buildings, you’ll need to start the application process to get the building listed.

Your local Regional Loan Center accepts and reviews applications for condo project approval. Fortunately, the application process is relatively simple: Collect the required condominium documents, submit them to the Regional Loan Center with your contact information and wait for the loan center’s decision.

The easiest way to do this is to ask your lender to submit the documents and start the process. Be aware that a condo building’s homeowners association is under no obligation to provide these documents to you or your lender.

Documents Needed For VA Condo Approval

Often, the biggest challenge is collecting the required documents. Help is available from the condo homeowners association, your county clerk and Regional Loan Center. Here are the documents you might need to provide:

• Recorded Condominium Declarations (commonly referred to as CC&Rs) or master deed
• Recorded project plat maps (plans showing property division) and/or condo site plan
• Recorded Articles of Incorporation
• Signed copy of the condominium bylaws
• Meeting minutes from the past two HOA meetings
• Condo budget and balance sheets

Your local Regional Loan Center will also need to see a statement from the HOA, addressing the following questions:

• Are there any current or planned special assessments?
• Is the project involved in any current or pending litigation?
• Is construction of the project complete?
• How many of the project’s units have been sold from the developer?

The Regional Loan Center will review the documents. If anything is missing, center representatives will ask for additional documentation.

Once you provide all the needed documents, the loan center staffers will send the application along to their staff attorney, who will review the documents to ensure that the project is meeting VA lending guidelines. The full review can take up to 4 weeks, depending on how busy the Regional Loan Center is.

Once the VA has decided, representatives will reach out to you (provided you gave them your contact info) and inform you of their decision. If all goes well, you will now be able to find your project on the VA approved condo list, meaning that the condo building is now eligible for VA lending.

Common Reasons The VA Denies Condos

The VA denies condo buildings for several reasons:

• A large number of condo owners might be behind on their monthly homeowners association fees.
• The building might have too many units filled with renters instead of owners.
• A single person, or financial body, might own too many of the building's units.
• There might be too many vacant units in the building.

VA Condo Approval FAQs

Is there a VA-approved condo list?

Yes. If you want to use a VA loan to finance the purchase of a condo, check out the VA’s approved condo list here.

Does it cost anything to get a condo VA-approved?

Home buyers do not have to pay anything when requesting that the VA approve a condo building. The condo building’s homeowners association, though, might have to pay fees to get approved.

My condo project is listed as “accepted without conditions” or “accepted with conditions.” What does this mean?

“Accepted without conditions” means that you can finance the purchase of your condo unit with a VA loan. “Accepted with conditions” means that the building’s homeowners’ association must still resolve certain issues. For instance, there might not be enough units that have sold in a new condo building. You won’t be able to buy with a VA loan in such buildings until buyers purchase more units.

How long does it take for the VA to approve a condo building?

The VA approval process is not always a quick one. Though it varies, the process can take a month or more.

The Bottom Line

Getting a condo building approved by the U.S. Department of Veterans Affairs is not always a quick process. If the building in which you want to buy isn’t already approved by the department, you might consider buying elsewhere if you want to use a VA loan to finance your purchase.

It always helps, no matter where you buy, to get preapproved for a mortgage loan before you start looking at homes. You can start the mortgage approval process with us today.