Buying a condo may make financial sense, especially if you are trying to keep your mortgage payment low. If you are a veteran and plan to use your VA benefits, though, you will have to find a condo that either has VA approval already or that is willing to become VA approved.
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The process to get a condo approved with the VA is tedious, but luckily, it’s not a process you have to do. Your lender will work alongside the condo’s association to get the process done.
Keep reading to learn what is entailed so that you can understand how long the process may take and how you can help it move along.
The Condo Must Meet Certain Requirements
In order for an association to be approved by the VA, it must meet certain requirements. These requirements are as follows:
- At least half of the units must be owner-occupied
- At least 85% of the owners must be on time with their association dues
- At least 75% of the units must be complete and sold
- There cannot be any pending litigation against the association or development
These are questions you or your realtor can ask the association. This will help you determine if it’s worth moving forward with the condo approval. If the development doesn’t meet even one of these requirements, the VA will not approve it.
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Working With the Association
The next step is to work with the association. They will need to provide the VA with a variety of documents for review. These documents include:
- A written request – The association must put in writing that they wish for their development to be VA approved. This isn’t a requirement for any association, so the VA wants to make sure it’s something the association wants, rather than what one buyer wants because they are interested in a unit.
- Bylaws and Articles of Incorporation – The association should provide a copy of the official bylaws and Articles of Incorporation for the association.
- Management Agreement – The association should provide an official copy of the management agreement. The VA needs to make sure the association is under competent management.
- Meeting Minutes – The association must provide a copy of the last two meeting minutes. If there haven’t been two meetings yet, at least the minutes of the initial meeting must be provided.
- Attorney Opinion Letter – This isn’t a requirement, but it’s a nice touch. If an attorney thinks the association deserves to be VA approved, he can write a letter stating such. This is often the convincing factor that the VA needs to move forward.
The VA Does the Rest
Once all of the above documents are provided, the VA will come up with a decision. Typically, they either mark it ‘approved’ or ‘denied.’ These are easy enough to figure out. In some cases, though, they may mark it ‘approved with conditions.’ As the name suggests, the VA will approve the request upon satisfaction of the conditions they state. This could be because something was missed or because the association wants further clarification on a topic.
You have to wait for this process to be completed before you can move forward with your VA loan. If the association doesn’t get approved, you’ll either have to choose different financing or a different development. Either way, the VA approval is helping you to make sure that you buy a condo that is worth buying. It’s just one more way that they try to protect you.
Meta Description: All condos must have VA approval before you can secure VA financing on it. The process is lengthy, but well worth it.
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