A condo isn’t a house or an apartment, but it shares traits with both. With a condo, you own your unit, but you share ownership of the land, building, and common areas with your neighbors. Because of this, you won’t need to worry about outdoor maintenance and you may have access to special amenities, like a gym or swimming pool. Condos offer many benefits that busy people can appreciate, so it’s no wonder that many service members and veterans are interested in using the housing benefits that they’ve earned with their service to fund the purchase of a condo. But is that possible? Can you buy a condo with a VA loan? What will you need to keep in mind?
Can You Buy a Condo with a VA Loan?
Why would you want to buy a condo? As Zoomer points out, owning a condo can offer some serious advantages. For starters, you are free to customize the interior of your unit. Because of the shared ownership, costs to maintain common spaces are also shared, so you can often enjoy access to amenities like swimming pools, gyms, or party rooms that would be out of reach if you purchased a single-family home. In addition, you don’t have to worry about making time to complete routine maintenance chores like shoveling snow or cutting grass because the condo association handles those tasks. Finally, condos are often conveniently located, which can make them appealing if you long to live in a prime location.
Can you buy a condo with a VA loan? Yes, as the VA makes clear, VA loans can be used to purchase condos, but there are a few conditions that you’ll need to meet.
As NerdWallet reports, VA loans have significant advantages. These government-backed loans come with competitive interest rates, relaxed credit requirements, no down payment requirement, no obligation for private mortgage insurance, and an approval process that includes steps designed to safeguard the borrower’s interests. Offered through private lenders by the U.S. Department of Veterans Affairs to those who have earned the benefit through service, VA loans are not available to everyone. If you want to use a VA loan to buy a condo, you must be eligible for a VA loan.
VA loans are generally available to service members, veterans, Nation Guard members, Reserve members, and surviving spouses who fulfill the entitlement’s requirements. Obtaining a Certificate of Eligibility allows you to confirm that you are eligible for this program. However, simply being eligible does not guarantee you a loan. As the VA explains, you’ll also need suitable credit and enough income to qualify for the mortgage you’re seeking.
The Property’s Eligibility
When you’re using a VA loan to purchase a property, you aren’t the only one who has to meet certain standards. Whether you’re interested in buying a home or condo, the property must also pass muster with the VA’s home loan program. The first rule to remember is that any property you buy with a VA loan must be intended for your primary residence. VA loans cannot be used to purchase vacation homes or investment properties. What other eligibility requirements must a condo meet? As VA.org indicates, the VA requires all condos purchased with a VA loan to meet the following conditions:
- The condo being purchased must be in a VA-approved development.
- A minimum of 50 percent of the units in the condominium development must be occupied by their owners.
- At least 75 percent of the community’s households must be current on their homeowners association dues.
- In a newly constructed condominium development, a minimum of 75 percent of the units must have been sold before a VA loan can be used.
How can you find out whether the condo that you’re considering has won the VA’s approval? The VA offers an online search tool that makes it easy. What if a condo isn’t on the VA’s list of approved developments? As Realtor.com reports, you may still be able to buy it with a VA loan if it meets the VA’s other requirements. To make it happen, your lender or the development’s HOA will need to ask the VA to approve the development. Seeking approval will require gathering and submitting documentation regarding the HOA bylaws, plans, plot maps, covenants, conditions, restrictions, and other relevant information. After reviewing the situation, the VA will make a determination. The process generally takes 30 days or more to complete.
When you want to use a VA loan to buy a condo, working with a lender who is familiar with the nuts and bolts of the VA home loan program can make the experience easier. At PrimeLending: Manhattan, Kansas, we understand how VA loans work, and we’re ready to use our expertise to help you get the most out of your benefits. Contact us today to explore your options.