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VA Condo Project Approval Process

Is it possible to buy a condo with a VA loan? The short answer is yes. Instead of using a VA loan on a single-family or multi-unit home, you can use a VA loan to buy a condo unit, and receive all of the usual VA loan benefits.

However, there are some regulations pertaining to what type of condos qualify for VA loan approval. Not all condo types will be approved by the VA.

VA Approved Condo List

In order to obtain VA financing for a condo, it must be added to the VA-approved condo list. In some cases, you may get lucky and be interested in a condo already on the list. To check whether the condo you want is VA-eligible, you can take a look at the VA-approved condo list.

How to Get a Condo VA Approved

If the condo you want is not on the VA-approved list, you will need to go through an approval process. To do this, your lender must submit documentation to the VA Office of Jurisdiction.

What Documentation Do I Need for a VA Condo Approval?

Gaining approval for a VA condo requires a fair amount of paperwork.

You and your lender will need to gather the following documents:

  • Master deed or Recorded Condominium Declarations (CC&Rs)
  • A written request for VA approval of the condo development
  • Homeowner association budgets bylaws
  • Financial statements
  • Minutes from the previous two homeowner meetings
  • Special assessments
  • Litigation statements
  • Plat, map or air lot survey
  • Covenant, conditions and restrictions declarations

VA Condo Approval Checklist

Once these documents are supplied, the VA's Regional Loan Center will review them with their staff attorneys to ensure the condo meets VA lending guidelines. This usually takes up to four weeks. The VA will look for potential conflicts but will want to see the if following guidelines are met:

  • Number of units: The condo development must have more than one unit on-site, although there is no maximum number.
  • Ownership limits: No single entity can own more than 10% of the condo units on site.
  • HOA dues: At minimum, 85% of the residents in the condo development must be up to date on Homeowners Association (HOA) dues for the upkeep of the development.
  • Sold units: At least 75% of the units in a new construction condo development must be sold rather than rented.

Approval Types for a VA Condo

Approval for a condominium with the VA is not just a yes or no decision. There are different approval types you might receive from the VA when trying to get a condo approved. Some of these include:

Approval Type Explanation
Accepted without conditions The condo passed the VA minimum property requirements.
Accepted with conditions The VA has concerns about the condo development but has approved it.
HUD accepted The VA approved a condo development since it has already been approved by the Department of Housing Urban Development (HUD). This is very rare but still possible.
Spot approval The VA has approved a single-unit in a condo development, even if the total condo development is unapproved.
Unaccepted The VA has denied approval for condo development.

How Long Does it Take to Approve a VA Condo?

The VA condo approval process can take anywhere from just 30 days to several months. It depends on how fast you can submit documentation and how busy the Regional Loan Center is.

Approving a VA condo is a two-step process that includes sending the condo approval application to the nearest regional office and having it reviewed by a staff appraiser.

Some cases can take months to get approved, so patience, diligence and a dedicated VA lender are crucial to getting your case across the finish line. You may even want to consider broadening your house-hunting options if you want to avoid a lengthy process.

Common Reasons the VA May Deny Approval to a Condo Project

There are several reasons why the VA may decide to deny approval for a condo project. Certain development conditions and restrictions can raise flags for the VA, which can harm your chances of getting it on the approved condo list.

Common reasons why the VA might deny approval on a condo loan includes the following:

  • The condominium community bylaws include language that prevents resale or foreclosure without HOA approval
  • The bylaws include “right of first refusal” language that prevents the owner from freely selling the unit
  • The development has age restrictions
  • The development is involved in active litigation

If the condo you want approved gets denied, there isn’t a VA restriction that prohibits the site from being revisited. However, it’s better to understand why the condo wasn’t approved before restarting the process again.

Approving a condo is usually a complex and time-consuming process which is why many buyers would rather keep looking for a condo that’s already approved. If not, getting a dedicated VA lender on board can help make the process simpler.