The VA condo approval process can sometimes be a little tricky. The Department of Veterans Affairs (VA) exists to make sure veterans buy properties that are safe, sound, and sanitary. If you’re a veteran looking for VA-approved condos, take a look with us at some of the information items that the VA has to evaluate.
1. Declarations, Bylaws, and Amendments
There may be amendments to the declarations and bylaws, which can cause the VA some concern in the VA Condo Approval Process.
Some of the items that the VA worries about are:
- Whether the Homeowner’s Association (HOA) has the first right of refusal regarding foreclosure proceedings on the property
- If there are delinquent HOA dues, whether that would supersede a lien position on title to the condo. Sometimes, this is hidden in bylaws or declarations
2. Plat Map
A plat map is a map that gives the latitude and longitude of where the condo project is located on the plat within the municipality.
3. Rules and Regulations
In the military community, we’ve seen a lot of rules and regulations on condominiums that have caused veterans heartburn. For example, some condos have rules against flying the American flag or a football team flag outside your condo.
If you’re a veteran, you probably don’t want to live in a condo that won’t let you fly the flag—it’s just one of the things that we veterans won’t do. You’ll want to look at the rules and regulations to consider these kinds of things before buying.
4. Meeting Minutes
To see what kind of business happens in the condo, the VA requires meeting minutes for the condo’s last two meetings. Meeting minutes give you great insight into what’s going on in the condo project you’re looking to purchase.
The VA looks for whether the dues collected monthly by the HOA (or those projected) allow enough operating income to cover maintenance.
Budgeting for Maintenance
Something that we look for in the condo’s maintenance situation is whether the declarations and bylaws include plans to turn the streets over to the city, municipality, or county when the condo is completed. If they’re not, the condo will have funds in its budget to make sure the maintenance is done on roads in the condo project.
So, as you’re driving around and looking at the condo project, pay attention to your surroundings (as veterans, we have great situational awareness) and look at the condition of roads, common areas, etc. Make sure they’re well-maintained. If you see an area that is not well-maintained, it’s likely a budget problem you’ll want to investigate.
For example, if you can tell there needs to be a resurfacing project coming up, you’ll want to see if the budget covers the cost of such a project.
6. Special Assessment Letter
You might have a condominium project that is redoing all the windows, fixing the roofs on the buildings, etc. to upgrade with some maintenance.
So there may be an upcoming special assessment coming up in the future. The meeting minutes will allow you to look at that.
7. Litigation Letter
Litigation letters include different types of legal action happening in the condo. Residents may be suing the HOA, or the HOA may be suing the builder. With the existence of any legal action, you’ll want to make sure there is enough of the budget set aside for legal fees.
You’ll also want to see what the extent of the legal challenge is. Is there an issue with construction quality, where homeowners have banded together to file a class-action suit against the builder? Or, was someone injured in the common area and is suing the HOA because it did not properly maintain its playground equipment?
8. Presale Letter
Presale letters are for new condominium projects. For example, if there is a brand new condo project with ten units, the VA requires that 70% of those, or seven units, are already pre-sold—meaning a contract has been written and someone will move into the condo when it’s finished.
Any time you’re dealing with a government agency, there always seems to be an “other” category. In this case, if the VA sees something during review, they’ll come and look at some additional documentation.
VA Condo Approval Process Classifications
There are two classifications of condos:
- VA-approved condos
- Those previously reviewed and deemed unsatisfactory—a.k.a., not approved by the VA
If you’re looking at a condo that has been previously denied by the VA, you should ask why. Here at Low VA Rates, we are working with a veteran going through the VA Condo Approval Process in Florida. Originally the veteran was interested in a condo that was originally not VA-approved . We asked the VA why, and they told us the reason, so we went to the HOA of the condo and asked them about the situation. They told us that the reason for the denial was just one of their bylaws that was not really enforced. So, they voted in the next meeting to change it. They’re now in the process of becoming a VA-approved condo. And this was a previously unapproved condo project!
The review time for a VA-approved condo is about four to six weeks before you can move in. You need to take the timeline into account if you’re writing an offer. We can’t start a loan application until the VA approves the condo project. So, don’t plan to close in three weeks if the condo project is not VA-approved. If you do, you’ll be risking your hard-earned money.
To find a VA-approved condo in your area, visit the VA website, click “Retrieve only approved condos,” and enter your area.
The VA Condo Approval Process With Low VA Rates
One of the benefits of working with the VA home loan specialists at Low VA Rates is that we will take the extra time to make sure you’re only looking at VA-approved condos. Or, if you’re looking at a non-VA-approved condo, we can help with that as well. We’ll walk you and your real estate agent through the steps and help you gather documents from HOA to send to the VA to try to get approval.