Monday Market Update: VA Condo Approvals 101
Find Out Why A VA Condo Approval Matters When Buying With A VA Loan
Welcome back to the Bobbi Decker Blog! We hope you are enjoying our brand NEW website! In continuing the theme of all that is new, we are talking about a topic this week that we have not covered before on our blog – VA Condo Approvals.
Virtually everyone has heard of VA Loans, right? According to the U.S. Department of Veterans Affairs, “We provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.” VA Loans are offered by private lenders, such as banks and mortgage companies, and since VA guarantees a portion of the loan – the lender can offer more favorable terms.
What most people may not know is that a VA Condo Approval is required if a veteran wants to buy a condo or townhome. This means that the condominium community and association must undergo a through review in order to be eligible for loan funds from the VA. Prospective homeowners who are purchasing with a VA Loan cannot buy in a multifamily community unless the project is VA Approved (the same is true for those using a FHA Loan; note that VA and FHA Condo Approvals are similar but not interchangeable). The financial and legal solvency of the community is assessed via a documentation review process. Items looked at include how many units are owners occupied vs. rented out, how many units are behind on their HOA dues, how many units are sold IF it is a newly constructed project, and if a single entity owns more than 10% of the units in the development.
The most disappointing part of a home search is when a prospective homeowner falls in love with a property that they cannot get financing on. The worst thing any real estate agent can do is show a veteran a condo or townhome that is NOT VA approved. Getting the project approved can take weeks (often months!) and the likelihood of the property getting sold before the approval is achieved is very high. No buyer deserves that kind of disappointment.
If you are VA Loan approved and looking at multi-family properties, the best thing you can do is ensure that your agent and lender are only showing you approved projects. That list can be found HERE. If you are interested in a community that is not VA Approved, you can request that the HOA get it approved.
I am pleased to announce that Harbortown in San Mateo is VA Approved - Accepted Without Conditions! (ID# 000272. Review Completion Date: 10/12/2020.) Last week, I had the honor of assisting in a closing for a veteran in this community and WOW… there is no better feeling than that. 😉
Please note that the information above is for informational purposes only and is not intended to replace the advice of the US Department of Veterans Affairs or your licensed & trusted mortgage advisor, nor serve as a guarantee of a project approval.
Resources & Further Reading:
US Department of Veterans Affairs
VA Interest Rate Reduction Refinance Loan
Eligibility Requirements For VA Home Loan Programs
USA VA Lending (A VA Approved Lender)
VA Loan Rates Are The Lowest Of Any Mortgage Program
VA Streamline Refinance: A Quick Way To Get A Better Rate
All our best,
Bobbi & Team
All my best,
Bobbi Decker
DRE#00607999
Broker Associate
650.346.5352 cell
650.577.3127 efax
www.bobbidecker.com
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