VA Home Loan for Condos
Homeownership is often one of the greatest goals of most people’s lives, and condominiums provide a more affordable option to make such dreams come true. Unfortunately, for many, onerous financing terms and requirements often are barriers to owning a home. However, the good news for veterans is that they can use VA loans to purchase a condo. There is a catch, though—the Department of Veterans Affairs must approve the condo.
- VA loans can be used to finance condominiums, but the property must meet VA condo approval requirements before obtaining a loan.
- Tools such as the VA-approved condo lookup can help you determine the building’s status and whether it is eligible for financing.
- Condos that aren’t approved can sometimes be approved through a VA condo approval waiver. Your lender can help you apply.
- Benefits of a VA condo loan include no private mortgage insurance, no down payment on most home purchases, and more favorable rates than conventional loans.
With no down payment requirement, no private mortgage insurance, or PMI, and competitive interest rates, VA loans typically offer better terms than conventional loans. Here’s what you need to know before you look for a condo to purchase with your VA loan.
Can a VA Loan Be Used for a Condo?
You can use a VA loan to buy a condo, but it must be on the VA-approved condo list to qualify, and you’ll need to meet certain requirements.
Eligibility Requirements for VA Loans on Condos
To use a VA condo loan, you need to meet the basic service eligibility criteria. Service members must have served at least 90 continuous days on active duty. Meanwhile, the service requirements for veterans vary depending on when they served. You must request a Certificate of Eligibility, or COE, proving you qualify for a loan from the VA.
Veterans must provide their discharge or separation papers, or form DD-214, summarizing their military service to obtain a COE..
Eligibility Requirements for VA Loans on Condos
In addition, to qualify for a loan, you must:
- Meet the lender's income standards: While the VA doesn’t impose income limits, private lenders do have income requirements.
- Meet the lender's credit requirements: The VA has no credit score criteria, but many lenders require a minimum credit score of 620 to obtain a loan.
- Live in the home as a primary residence: You must plan to live in the home you purchase.
After doing this, you must ensure the VA has approved the condo.
How To Check if a Condo Is VA-Approved
To determine if the VA has approved a condo, use the VA-approved condo lookup tool. This tool will allow you to look for only approved condos by condo name, the local regional office through which the condo is registered, and the condo’s location.
Key Benefits of Using a VA Loan To Buy a Condo
The benefits of using a VA loan to purchase a condo include the following:
- No down payment as long as the price of the condo is not higher than its appraised value
- Better interest rates and terms than conventional loans from mortgage companies, credit unions, and private banks, also known as personal lenders
- No private mortgage insurance, or PMI
- No penalty fee for paying off the loan early
- Lower closing costs if the seller, lender, or other third party covers them
The Application Process for a VA Loan for a Condo
Obtaining a VA loan for a condo generally follows the same process as other VA-backed mortgages. However, there is a key difference: the VA must approve the condo. Condos that haven’t yet been approved can still receive approval through the VA’s online portal.
If the condo isn’t approved, some lenders may help you submit a VA condo approval waiver. Success is not guaranteed, however. Once you find a condo you’d like to purchase and that’s VA-approved, you must first obtain your COE. Then, you must take the typical application steps. Such as getting prequalified, choosing your lender, and making an offer on the unit of your choice. When choosing a lender, make sure they are familiar with VA loans, offer favorable rates and terms, and are transparent about fees.
Finally, once you’ve entered a purchase agreement with the owner, your lender will request a VA appraisal.
Frequently Asked VA Condo Loan Questions
Get answers to some of the most common questions about VA condo loans here.
Can I buy a newly built condo with a VA loan?
Yes, you can buy a newly built condo if the VA has approved it.
What if the condo I want is not on the VA-approved list?
If the condo you want to purchase isn’t on the VA-approved list, then you will need to request a VA condo approval waiver. Typically, your lender can help with this step.
Can I buy a condo with a VA loan in a building that's not 100% owner-occupied?
Yes, you can, so long as the condo meets the VA’s requirements and at least 51% of all units are owner-occupied.
Are there special requirements for buying a townhouse or condo unit in a mixed-use building with a VA loan?
If you’re using a VA loan for a condo or a townhouse in a mixed-use building, non-residential or commercial space can’t be greater than the residential portion. Typically, businesses must not occupy more than 25% of the space.
Secure Your Condo With a VA Loan Today
VA loans are generally the most affordable, flexible, and convenient way for veterans and service members to become homeowners. Whether you are financing a single-family home, condo, or another kind of residence, these loans can save you money and provide better terms. They often have no down payment, no PMI, and no or limited closing costs. Additionally, lenders usually offer competitive interest rates.
At Veterans Guide, we can help you navigate the VA condo loan process. We’ll provide you with the guidance and information you need to set you on the homeownership path. Contact us today.
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