Can you buy a condo with a VA loan?
Tucson / Phoenix: Can you buy a condo with a VA loan? Yes, veterans and active military members can purchase condos with VA loans if the property is on the VA’s approved condominium list. Benefits include no down payment, lower interest rates, and no PMI.
Introduction to VA Loans for Condos
VA loans are backed by the U.S. Department of Veterans Affairs, designed exclusively for veterans, active-duty service members, certain members of the National Guard and Reserves and surviving spouses. They offer several significant advantages over traditional mortgages, making homeownership more accessible and affordable for those who have served their country.
What are the VA Condominium Approval Requirements?
The Department of Veteran Affairs or VA must approve a condo complex in order for a Veteran borrower to purchase a condo unit. The good news is there are hundreds of condo developments across Arizona that are already on the VA approved condo list.
The Department of Veterans Affairs is concerned with your selection of a condominium community, as the extensive shared spaces within these complexes play a significant role in determining the worth of your individual unit. So what is the VA looking for to get an approval?
VA Condo Approval Checklist
To be approved by the VA, the condo your condo development must meet these requirements:
- At least 50% of the units must be occupied by their owners. In other words, less than 50% of the units can be rented out to tenants.
- Less than 15% of the unit owners are behind on their Homeowners Association dues.
- For newly constructed condo developments, or projects recently converted from apartments, at least 70% of the units must be sold.
- The project must consist of more than one unit.
- No single entity (individual, investor, or company) may own more than 10% of units in the development. This is a big one.
The VA Approved Condo List
You can now check the VA’s Approved Condo Report to see if the condo unit you want to purchase here in Arizona is on the approved development list. I will help you navigate through the VA’s Approved Condo website.
Navigating the VA Approved Condo List Website
Once you’ve concluded that a condominium suits your needs, the subsequent step involves exploring the array of condo communities within your desired area that have received approval from the Department of Veterans Affairs.
First, go check the VA’s Approved Condo Report to see if the condo unit you want to purchase here in Arizona is on the approved development list. When you go to this page on the VA’s website, you should see this screen:
How to find your Condo’s on the VA approved list
Here’s how to use the form above, which is part of va.gov, to find VA-approved condo developments:
- First, click the ‘Approved’ box on the first line so you’ll see only condo developments who have earned some level of VA approval.
- If you’re looking for a specific complex, enter the first few letters of the condo name in part 2 of the form. If you’d rather see a list of condo developments in a city or state, leave space 2 empty.
- In part 3 of the form, it’s easiest to leave the default selection “All Offices” unless you’d prefer to work with a specific VA office.
- You’ll have to enter your state. You could put in your county and city if you’d like to narrow the results further.
Next, we’ll look at a specific example.
Searching for a VA Approved Condos – Example
Let’s say you’d like to buy a condo with a VA mortgage loan in Tucson, Arizona, but don’t already have a specific condo complex in mind.
In part 4 of the form, it’s permissible to input just the city and state.
Upon a successful match with your search criteria, you can expect to view the following screen after your submission:
On this day, the search showed 35 condo complex developments in Tucson on the list. In order to view the status of any specific development, you would have to select the “Plus” symbol located in the rightmost column.
Clicking the “Plus” sign for the condo development will show you its approval status:
Not all approved VA condo complexes have the same approval status. So let’s dig in a bit further and explain what each status means.
Different types of VA Condo Approvals
In this case, you can see CANYON VIEW AT VENTANA complex has been “Accepted Without Conditions” as of February 20,2003. Even though this has been a few years, this complex meets the VA’s guidelines, and you could buy using your VA home loan benefit.
Accepted Without Conditions
When you see this status, you can proceed with your VA loan as if you were buying a single-family residence or SFR. The complex meets the VA’s requirements for a VA financing.
Accepted With Conditions
Accepted with conditions’ indicates that while the VA has given its approval to the complex, it holds reservations regarding one or more elements within the complex’s application. For example, one person may own almost 10% of the units, or the complex may be approaching the tipping point of tenant-occupied units.
This scenario shouldn’t hinder your ability to utilize a VA loan; however, you might need to complete additional paperwork, acknowledging your comprehension of the conditions and affirming your decision to continue with the loan regardless.
HUD Accepted
Historically, the VA accepted any condo project that was FHA-approved by the Department of Housing and Urban Development (HUD). See below with COUNTRY CLUB MANOR.
In the past, the VA would automatically approve any condominium project that had received FHA approval from the Department of Housing and Urban Development (HUD). See below with COUNTRY CLUB MANOR.
Over a decade ago, this policy was altered; however, older complexes that secured HUD approval before December 2009 remain eligible for a VA loan.
But this isn’t guaranteed. Working with a knowledgeable VA loan officer that has done a few condos comes in handy. They know where and how to check to see if it still qualifies.
Unaccepted
Condominiums situated in communities labeled as “unaccepted” do not qualify for VA financing. This status applies to those that have either never undergone the VA’s approval procedure or have been subjected to the process but were subsequently rejected by the VA.
So can you buy a condo with a VA loan??
As you can see, you can use your VA home loan benefit to purchase a condo, if it is approved through the VA. But what if find a condo that you really like, but it is not approved? Should you just move on and find another condominium project that will accept VA financing? So what do you do?…
What if the Condo is not on the VA Approved List?
Should a condominium project that interests you not appear on the list of VA-approved properties, you have the option to request that your lender submit documentation to initiate an investigation into the property, determining its compliance with the approval criteria.
We will dive into the process of what it takes to get a condominium project approved by the VA. Will put a link once we have this article up.
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Joseph Small and Team at Patriot Pacific Financial Corp – Arizona’s VA Home Loan Experts! – have 20+ years of experience of helping eligible veterans and active-duty service members use their VA home loan benefit. Joseph is also a certified Veteran Mortgage Advisor. Give us a call to get started.
Joseph Small is also licensed in South Carolina (MLO-380188) and North Carolina (I-219980), if you need assistance with a purchasing a home.
**All loans subject to underwriter approval. Terms and conditions apply, subject to change without notice. Patriot Pacific Financial Corp is an Equal Housing Lender.
