Final NVAR VLOG 2.mp4 from David Piatek on Vimeo.
VA Condo Approvals - Easier Than You Think
by David Piatek
Hi everyone, I’m David Piatek, Senior Vice President at The Federal Savings Bank and an NVAR Strategic Partner. Welcome to another video blog talking about Military members and using the VA Home Loan. Today’s topic: Working with military members that want to purchase a condo! SPOILER ALERT Did you know every condo can now be VA APPROVED even if it’s denied?!?! No – it’s not a typo!
Condo’s are one of the most affordable sources of housing in urban area’s but there’s one big problem! Working with a military member trying to use their VA Home Loan to purchase a condo can be troublesome and difficult, at least that’s what people think! In order to use the VA Home Loan, a condo needs to be VA Approved causing a lot of military members and Realtors to lose opportunities. Knowing the right steps and the process of getting a condo VA Approved can open up the door helping families and becoming an expert in a niche market.
When a military member has identified a condo they want to make an offer on, the first step is to check if the condo is VA approved… at this link: https://lgy.va.gov/lgyhub/condo-report. The best way to search the website is by putting in the state and submiting. You’ll have to search by the Condo Association Name and NOT the property management company or address, which people often times confuse. If you don’t find the condo then it’s most likely not VA Approved. On the other hand,if you find the condo – you can expand the plus sign to see the status. If it say’s “Accepted without Conditions” – you’re good to go – in fact no condo doc’s are required AT ALL and once the condo is VA Approved, it’s VA Approved for life. Word of caution, this can also cause military members undo harm as the building might be in financial trouble or changed its declarations, bylaws, rules and regulations to the point that the military member might find the condo favorable.
So what happens if a condo is NOT VA approved? Typically, the condo board can go through the process by hiring a company which typically costs $600 - $1,200 and then requires a vote to approve the expense which can take a while. That doesn’t sound good – does it? Especially in this market. This is where the MAGIC happens. We offer FREE VA condo approvals if the client works with us and the best part is that it doesn’t cost the association, Realtor or borrower anything to get the approval. What’s even better, since there is no cost to the condo association – no board approval is required, we gather the documents like we normally do.
There’s 2 things that can get a condo denied for VA Condo Approval. The Right of First Refusal and Leasing Restrictions. Leasing restrictions of any kind to include rental cap, condo association needing to vet a tenant, basically anything that would hinder the ability of a military member to rent a unit except for no short-term leases like AirBNB or having a 1 year minimum lease is OK. BIG misconceptions around the approval process include:
- You can’t have more than 50% rentals in the building – FALSE – there is no limit
- The building is only 2 units and won’t qualify – FALSE – there is no minimum or max units
- There’s litigation in the building so it can’t get approval – FALSE – VA allows for various litigation
- It’s a townhouse so we don’t need a VA Approval – FALSE - most townhomes are condos
- It takes 60 – 90 days for approval – Fales – normal turn-times are 5 – 10 days
With all that being said, why is the title of the article “VA Condo Approvals – Easier Than You Think”? Because a recent changed now allows for ALL condos to be VA Approved with a waiver. The condo still needs to work with us to gather all the documents and submit them to the VA. Once the condo is denied, we have the buyer submit a waiver which normally takes a couple of days to get approval. The majority of my clients buying condos - are not buying VA Approved.
The VA Home Loan is a phenomenal product, that offers huge benefits and savings to military members and their families. If you have questions about the VA Home Loan or working with military members, please give me a call at 202-875-1010. I’m happy to help.
Have a great day.
Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property.