If you’re a veteran or active-duty service member looking to buy a condo with a VA loan, you may have come across a common hurdle: not all condos are VA-approved. So, can you still get a VA loan for a non-VA-approved condo? The answer is yes, but it requires extra steps. This guide will walk you through the process of getting a non-VA-approved condo approved, the requirements involved, and practical strategies to streamline the process.
Understanding VA Loan Condo Approval
VA loans offer veterans and military personnel an opportunity to purchase homes with no down payment and favorable loan terms. However, for a condo to be eligible for a VA loan, it must be on the VA-approved condo list, ensuring it meets certain financial, legal, and operational criteria.
Why Does the VA Require Condo Approval?
- Financial Stability: Ensures the condo association is financially sound and not at risk of foreclosure.
- Occupancy Rate: At least 50% of units should be owner-occupied.
- Legal Compliance: The association must meet VA and local laws.
- Reserve Funds: The condo must have adequate reserve funds to cover maintenance and emergencies.
- Insurance Coverage: The property must have sufficient insurance coverage to protect against common hazards and liabilities.
- No Excessive Investor Ownership: The VA wants a balanced ownership mix to prevent financial instability.
If a condo isn’t VA-approved, it doesn’t necessarily mean it’s a bad investment—just that it hasn’t gone through the VA’s review process.
How to Get a Non-VA-Approved Condo Approved for a VA Loan
If your dream condo isn’t on the VA’s approved list, don’t worry. You can request VA approval by following these steps:
1. Check the VA’s Approved Condo List
Before you start the approval process, check if the condo is already VA-approved. Visit the VA’s Condo Approval Website and search by state, city, or condo name.
- ✅ If the condo is approved – Proceed with your VA loan.
- ❌ If the condo is not approved – You’ll need to apply for approval.
2. Work with Your Lender to Request VA Approval
Most VA-approved lenders are familiar with this process and can help submit a VA Condo Approval Package. This typically includes:
- HOA (Homeowners Association) Documents: Bylaws, CC&Rs (Covenants, Conditions & Restrictions), and financial statements.
- Occupancy and Owner-Occupancy Rates: The VA prefers a 50%+ owner-occupancy rate.
- Litigation Records: Ensures the condo isn’t involved in legal disputes that could affect its financial stability.
- Reserve Fund Documentation: Proof that the association has adequate reserves.
- Insurance Policies: The condo’s master insurance policy must meet VA guidelines.
- Budget and Financials: Detailed financial records to prove long-term sustainability.
3. Have the HOA Cooperate in the Approval Process
The Homeowners Association (HOA) must be willing to provide documentation and comply with VA requirements. Some HOAs may be hesitant due to additional paperwork, so it helps to work with a lender who can explain the benefits.
4. Wait for VA Approval (30-90 Days Process)
Once submitted, the VA review process can take 30 to 90 days. The timeframe depends on:
- How quickly the HOA submits required documents
- The complexity of the condo’s financials and legal standing
- The VA’s current processing times
5. Consider Alternative Options
If the approval process is delayed or denied, here are your alternatives:
- Find a VA-approved condo: Search for already-approved condos to avoid delays.
- Use a different loan type: Consider FHA, conventional, or USDA loans if a VA loan isn’t an option.
- Opt for a single-unit approval (Spot Loan): The VA doesn’t offer spot approvals, but FHA does, which may be an option for some buyers.
Pros and Cons of Getting a Non-VA-Approved Condo Approved
✅ Pros
✔ Expands your housing options
✔ Allows you to benefit from VA loan perks (no down payment, lower interest rates)
✔ Increases resale value by making the condo VA-approved for future buyers
✔ Can make the entire condo complex more attractive to veteran buyers
✔ Helps HOAs attract a wider range of potential homeowners
❌ Cons
❌ Lengthy approval process (up to 90 days or more)
❌ Requires HOA cooperation, which may not always be easy
❌ Not all condos meet VA standards, leading to potential denials
❌ Additional paperwork and administrative effort for the buyer and HOA
Key Takeaways: Should You Pursue VA Condo Approval?
- Yes, you can get a non-VA-approved condo approved for a VA loan, but it takes time and effort.
- Work with a VA-approved lender to navigate the process.
- Check the VA’s condo approval list first before starting the process.
- HOA cooperation is crucial to getting approval.
- If the process is too complicated, consider alternative loan options.
- Being proactive can improve the chances of approval and make homeownership more accessible for veterans.
FAQs
1. How long does VA condo approval take?
The process usually takes between 30 to 90 days, depending on how quickly required documents are submitted and reviewed.
2. Can I speed up the approval process?
Yes! Work with an experienced VA lender, ensure the HOA is cooperative, and submit all necessary paperwork promptly.
3. What if my VA loan is denied because the condo isn’t approved?
You have options:
- Find a VA-approved condo
- Request VA approval for the condo
- Consider alternative loan types like FHA or conventional loans
4. Is getting a condo VA-approved worth the effort?
Yes, especially if you’re set on a particular condo. It can increase the property’s value and open the door for future veteran buyers.
5. How do I find a VA-approved lender?
Most major mortgage lenders offer VA loans. Look for lenders specializing in VA financing to get the best guidance.
Need Help? Take the Next Step
If you’re looking to buy a condo with a VA loan, contact a VA-approved lender to guide you through the process. You can also use online VA mortgage calculators to estimate your potential payments and determine affordability.
Looking for VA-approved condos? Search the VA’s Condo List today!
By taking the right steps, you can make your condo purchase dream a reality while enjoying the benefits of a VA loan.