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A condominium building

VA Condo Project Approval Process

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Mortgages through the VA home loan program aren't just for suburban homes. Along with single-family homes and multi-unit properties, military buyers can consider buying in a VA approved condo development.

VA-approved lenders and experienced real estate agents can help borrowers find out if a property is on the approved list. Military borrowers considering a condo can also register to view the VA approved condo list online.

For condo developments that aren’t approved yet, there is a VA condo approval process outlined by the Department of Veterans Affairs.

How to Get a Condo VA Approved

The VA Lender's Guide has a list of procedures to get a condo project approved if it is not already on that list.

Your VA loan lender will submit condo approval documentation to the VA on your behalf, and then those documents will be reviewed to ensure compliance with VA regulations. According to the VA, your lender must provide two documents to the VA Office of Jurisdiction:

  1. Written request for VA-approval
  2. Copy of the condominium's organizational documents

A condo’s organizational files might include homeowner association bylaws, financial statements, minutes from recent homeowner meetings, special assessments, litigation statements and more. Unfortunately, condominium developments have little incentive to provide these documents, which can sometimes stand in the way of getting VA approval.

Once your project has been approved, the VA may require additional conditions to be met prior to VA guaranty of an individual loan in the project. For example, there may be a pre-sale requirement and restrictions based on the completion of the project. Those can include minimum VA requirements for common areas and other issues that could affect condo conversion or construction.

VA Condo Approval Checklist

The VA has to review the condo association’s documents and bylaws to look for any potential conflicts. Their goal is to ensure that veteran homebuyers aren’t purchasing in highly restrictive developments or in a development that will make reselling the property difficult.

Here are some general guidelines for VA condo approval:

  • The condo development must have more than one unit
  • At least half of the units need to be owner-occupied
  • No single entity can own more than 10% of the units
  • At least 85% of residents should be up to date on HOA dues
  • At least 75% of the units in a new construction condominium development must be sold

Can the VA deny a condo project?

Yes, the VA can deny a condo project or suspend the approval process based on "deviations from VA requirements." But that doesn’t have to mean the end of the road. A condo project that is denied can be revisited, pending receipt of additional information required by the VA.

As a VA homebuyer, considering condos could widen your house hunting horizons. But be aware, if you fall in love with a condo that isn’t a part of a VA approved development, the approval process could take months from start to finish. Patience, diligence and a dedicated VA lender will be crucial in getting you to the closing table.

Common Reasons for the VA Deny Approval to a Condo Project

Certain development conditions and restrictions raise red flags with the Department of Veterans Affairs and will seriously reduce the chances of getting a development on the VA approved condo list.

How to spot VA condo approval red flags:

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