Looking to buy a townhouse using your VA loan? You might be wondering if it’s even possible—well, the answer is yes, absolutely! But, just like with other property types, there are some key things you need to know before jumping in.
In today’s video, we’re going to break down how the VA home loan works for townhouses, from eligibility to the approval process. If you’re thinking about buying a townhouse, we’ve got all the information you need right here.
First, let’s start with the basics: Yes, you can use your VA loan to buy a townhouse. In fact, the VA loan is one of the best options for many veterans, thanks to its no down payment requirement and lower credit standards.
But here’s the catch: the townhouse must meet the VA’s eligibility requirements, and there are a few key things that make townhouse properties a bit different from single-family homes.
The first requirement is that the townhouse needs to be part of an eligible development. The VA will only approve loans for townhouses that are within developments that meet certain criteria. These include things like property condition, homeowner association rules, and the overall financial stability of the development.
This is different from buying a single-family home, where the only thing that matters is the condition of the property itself. Townhouses are often part of a larger community, meaning you’ll need to check out the rules and financial health of the HOA (Homeowners Association) as well.
So, how do you check if the townhouse you’re interested in is eligible? Well, you’ll need to look up the property’s eligibility on the VA’s list of approved developments. If the townhouse complex is already on the list, you’re good to go.
If the property isn’t listed, don’t worry. You and your lender can still work to get the townhouse development approved, but that can take some time. This is something to consider, especially if you’re trying to close quickly.
Another thing to keep in mind is the condition of the townhouse. The VA requires that the property meets its Minimum Property Requirements (MPRs), which ensures the home is safe, secure, and livable.
The appraiser will inspect the townhouse to make sure it’s in good condition and doesn’t need any major repairs. This includes everything from the foundation to the roof. If the property doesn’t meet these standards, you may not be able to proceed with the purchase.
Once you’ve passed the appraisal and everything is good to go, you’ll move on to the next step—closing the deal. And just like with any other VA loan, you won’t need a down payment. The VA loan also caps the amount you’ll pay in closing costs, which is a huge benefit.
However, be mindful that there will still be closing costs, which are typically lower than conventional loans. These can include things like lender fees, title fees, and appraisal costs. You may also be able to negotiate with the seller to cover some of these costs.
Another thing to think about when buying a townhouse is the HOA fees. Since most townhouses are part of a larger development, you’ll likely have monthly HOA fees for things like landscaping, common area maintenance, and insurance.
While these fees don’t factor into your VA loan approval, your lender will want to ensure that you can comfortably afford the HOA fees along with your mortgage payments. Make sure to consider these costs when budgeting for your new home.
Lastly, just like with other properties, if you’re buying a townhouse with a VA loan, you can reuse the benefit. So, if you’ve already used it for one home, you can use it again for another townhouse, provided you still have entitlement left.
To wrap it up: buying a townhouse with a VA loan can be a great option for many veterans. You get the benefit of no down payment, lower closing costs, and the ability to purchase a home in a development with shared amenities. But, make sure the property is in an eligible development, and keep an eye on those HOA fees.
If you need help navigating the townhouse buying process or have any questions about your VA loan, don’t hesitate to reach out to us at Veterans Guide. We’re here to help every step of the way, making sure you get the best deal possible.
Interested in learning more about other property types you can buy with your VA loan, like condos or multi-family homes? Make sure to check out our next video. And don’t forget to hit that subscribe button!
