The VA must approve condominium units for a VA loan guarantee. To find out if the condominium development is on the approved list, enter the condominium name and location into the database of VA-approved condominiums, or you may talk with your Military Relocation Professional (MRP). VA Approval does not expire once obtained.
Suppose the condominium is not on the list. In that case, it may be wise to reach out to the condominium association or manager to gauge the feasibility of having it approved by the VA. The condominium must undergo the VA approval process, adding extra time and work. Suppose the condominium association or the unit seller is unwilling to provide the required documents and information. In that case, the veteran may have to choose a different loan program or a different condominium.
The primary documents the condominium association will need to provide to the lender when requesting VA approval include the following:
- Condominium declaration
- Articles of incorporation
- Condominium plat and unit plans
- Expansion plans
- Management agreement (if any)
- Current financial statements (income statement and balance sheet), including reserves
- Special assessments/litigation statement
- Minutes for the last two association meetings
- Any leases or service contracts
- Architect or engineer statement if a conversion
- An attorney opinion letter (not required, but strongly suggested because it is believed this will reduce the processing time; however, it may be expensive to obtain. The suggested contents of this letter are in Chapter 16 of the VA Lenders Handbook.
If the condominium does not have complete condominium disclosure documents, then it stands to reason that it will have a difficult time qualifying for VA approval.
Some of the basic VA qualification standards include:
- Fifty percent or more of the units must be owner-occupied.
- No more than 15 percent of the unit owners can be behind in assessment payments.
- If condominiums are newly constructed, 75 percent of the units must be sold before allowing VA loans.
To purchase an unapproved condo, a lender must submit the request for VA approval and the condominium documents to the VA. It’s a waiting game. The VA review process may take anywhere from 30 to 90 days. Agents should ensure they are aware of the approval process timeline upfront, and your MRP must draft the offer to allow ample time.
MOVING TO OR WITHIN WISCONSIN? START WITH MILITARY RELOCATION PROFESSIONAL
When military staff and their families relocate, the services of a Military Relocation Professional who understands their needs and timetables makes the transfer easier, faster, and less stressful.