The condo must be VA approved
VA keeps a list of approved condo projects. If the building is on it, financing is straightforward. If it isn't, your lender can request approval by submitting the association's legal and financial documents to VA. That takes time and depends on the association cooperating, so start early.
How VA approval differs from FHA
VA reviews the condo's legal documents to make sure they don't unfairly restrict owners, and looks at the project's general soundness. It doesn't use FHA's single unit approval process. Some buildings that don't qualify for FHA can qualify for VA, and sometimes the reverse. If you're a veteran, it's worth checking both. See FHA condos.
Florida's newer condo laws
Florida now requires milestone structural inspections for older multi story condo buildings and structural integrity reserve studies, and associations can no longer waive certain reserves. Many have raised dues or levied special assessments. Ask for the latest inspection and reserve study, and whether any assessment is pending or planned.
Dues and assessments affect your loan
HOA dues count in your debt ratio and residual income. A large special assessment can affect your cash to close or how much you qualify for. With a VA loan, strong residual income can help absorb higher dues, but plan for them up front.
Condotels
Condo hotels with rental programs and front desks generally aren't eligible for VA financing. For those, look at non QM condotel loans.
What to check before you offer
Is the building on VA's approved list, and if not, will the association help with approval? What are the dues, and what do they cover? Any special assessments pending or planned? What do the milestone inspection and reserve study show? How responsive is the association to lender requests?
Approval requested, closing on time
Aisha found a condo near downtown Orlando that wasn't on VA's list. The association was well run and agreed to provide its documents.
We requested VA approval the week her offer was accepted, built extra time into the contract, and she closed with no down payment.
Frequently asked questions
How do I know if a condo is VA approved?
VA publishes a list of approved condo projects. I can check any building for you.
Can I buy a condo that isn't VA approved?
Possibly. The lender can request approval, but it takes time and the association must cooperate.
Can I use VA on a condotel?
Generally no. Non QM condotel loans are an option.
Do special assessments affect a VA loan?
Yes. They can affect your cash to close, debt ratio and residual income.