By: Stephanie Diana Gast- Wilson
This being the weekend after the 4th of July where we all as American’s celebrate our hard won freedoms and those who risk their lives to uphold the freedoms we hold so dear. That being said this article will explore what goes into doing a VA loan on a Condo.
As per usual the CYOB (Cover Your Own Behind) disclaimer; this is meant to be a brief overview of VA condo loans if you have questions regarding your own loan or future loans through VA please speak with your loan officer and Underwriter. Now that is out of the way let’s continuing on our topic of VA loans and condos.
So, few may realize that Condo home purchases can be done using VA loans. The amenities and perks of owning a condo are by no means out of reach for our service members. First off any borrower, investor, loan officer, ect, needs to understand that VA loans and FHA loans can take time to complete. It is recommended as a VA borrower that before online shopping for a home that you check the VA data based for condos this will save time and money. You can check if a condo project is approved at https://vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch.
Now as many have though cautioned by myself and everyone else in the mortgage field; they use their heart when home shopping which makes this process personal. So, if you fall in love with a Condo project that isn’t already VA approved be prepared for a potentially long and up hill battle.
The next step involves the Loan Officer and yourself speaking with the HOA management towards looking into becoming VA approved. Brace your self in case they are not interested in acquiring the materials and documentation for going through this process. However, if the HOA is open to it (which honestly helps them in the long run as VA approval doesn’t expire like FHA or USDA approval and leaves more options for buyers and sellers in the project [pardon me as I get off my soap box]) once all the documentation is turned in to the VA the process can take up to 90 days just to review. Also there is a cost to get the project reviewed which can be upwards of $850. The project will also need to provide an attorney letters, along with the required condo documentation.
*Declaration of Covenants, Conditions and Restrictions (CC&R’s)
CC&R’s often go by other names such as Condo Declarations, or Master Deed.
*Be sure that you provide the recorded signed copies not just the ones in the HOA’s desk drawers. Check with your title or escrow officer for this item.
Signed Bylaws for HOA
*Articles of Incorporation for HOA
Some states like Massachusetts do not require a project to be incorporated as a non profit as other states so check the local laws first.
*Management Agreement (unless self managed)
Make sure this is a copy of the approved current year operating budget.
*Current Financial Statements (Income Statement & Balance Sheet also a reserve study done in the last 3 years wouldn’t hurt).
*Minutes of last 2 HOA Meetings
*Recorded Amendments for annexation
Plat Map and/or Air Lot Survey
Once all this has been submitted you will receive an approval or denial. It is wise in this case to hope for the best but; expect the worst. Which means shopping for another property. Hopefully this helps to arm you to be a more savvy VA loan borrower and investor. However, again always reach out to your loan officer and underwriter to see what can be done to further assist you in your property purchase.
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