If you’re ready to make an offer on a condo that’s a perfect fit for you and you’ve decided you want to finance the purchase with a VA loan, you may still have one major hurdle to clear. That hurdle may be that the condo building in which you want to buy a unit hasn’t been reviewed or approved by the U.S. Department of Veterans Affairs – the government agency that insures VA loans.
If that’s the case, there’s no reason to panic. Even if your condo unit is in a building not on the VA-approved condo list,you can take steps – or the condo building’s homeowners association can take steps – to get the building the approval it needs. Once approved, you can apply for a VA loan to finance the purchase of that condominium unit.
A VA loan – available to active-duty service members, U.S. military veterans and their widowed spouses who all meet specific eligibility criteria – is one of the most attractive loan products. That’s at least partly because VA loans require no down payment, which means a significant upfront money savings when applying for the loan.
Let’s walk through the basics of securing VA condo approval and the process of getting a condo on the VA-approved list, if needed.
What Is The VA-Approved Condo List?
The biggest challenge of 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 in which you want to buy space isn’t on the list of VA-approved buildings, you’ll have to take steps to change that.
Finding A Condo On The VA Condo Approval 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 home loan is checking the VA-approved condo project list to make sure the building in question is on the list.
Once you log onto the page, you’ll need to enter the condo name, the regional office where the condo is registered and the condo’s location. You’ll then get a customized condo report to see if the condo building that interests you has made that list. If you can locate your project and its status reads “Accepted Without Conditions,” you’re clear to apply for VA lending on the project.
If you see your project listed 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.
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VA Loan Condo Approval Process
If the condo building in which you want to buy isn’t on the VA-approved condo list or is listed as “rejected,” getting it approved will require some work. Next, we’ll look at two condo approval statuses and each one’s implications on getting the necessary approval.
VA Condo 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. This info might include a list of officers, a copy of condo bylaws, or documents proving 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 its 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.
Building Not On VA Condo Approval List
If your condo project isn’t 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.
How To Get A Condo VA-Approved
Let’s take a look at what documents you’ll need for a VA condo approval, as well as some reasons the VA might deny your condo approval request.
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 the Regional Loan Center. Here are the documents you might need to provide:
- Recorded condominium declarations or a master deed
- Recorded project plat maps (plans showing property division) and/or a condo site plan
- Recorded Articles of Incorporation
- A signed copy of the condominium bylaws
- Meeting minutes from the past two HOA meetings
- A 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’ll review the documents to ensure the project is meeting VA lending guidelines. The full review can take up anywhere from 30 days to several months, depending on how busy the Regional Loan Center happens to be.
Once the VA has decided, representatives will reach out to you (if you gave them your contact info) and inform you of their decision. If all goes well, you’ll now be able to find your project on the VA-approved condo list, meaning the condo building is now eligible for VA lending.
Common Reasons The VA Denies Condos
The VA denies condo buildings for several reasons, which may include these:
- A large number of condo owners are behind on their monthly homeowners association fees.
- The building has too many units filled with renters instead of owners.
- A single person, or financial body, owns too many of the building’s
- The building has too many vacant units.
VA Condo Approval FAQs
Below are frequently asked questions about the VA condo approval process.
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 don’t 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 the proper approval.
What does it mean if my condo project is listed as ‘accepted without conditions’ or ‘accepted with conditions’?
“Accepted without conditions” means you can finance the purchase of your condo unit with a VA loan. “Accepted with conditions” means the building’s homeowners association must still resolve certain issues. For instance, a new condo building might not have enough units that have sold. You won’t be able to use a VA loan to buy in such buildings untilmore units are purchased.
How long does it take for the VA to approve a condo building?
The VA approval process isn’t always a quick one. Although it varies, the process can take a month or longer.
The Bottom Line
Getting a condo building approved by the U.S. Department of Veterans Affairs isn’t always a quick process. If the building where you hope to buy a unit isn’t already approved by the VA, you might consider buying elsewhere if you want to use a VA loan to finance your purchase.
Dan Rafter
Dan Rafter has been writing about personal finance for more than 15 years. He's written for publications such as The Washington Post, Chicago Tribune and Wise Bread.
