VA requirements

VA Loans and Condo Project Approval Procedures

December 11, 2018


VA Loans and Condo Project Approval Procedures

va loansWe frequently get questions about VA loans for condos. One commonly asked question involves the details of the VA loan approval process for condos.

If a borrower wants to purchase a condo unit with a VA-guaranteed loan, the project must be VA approved.

The VA Lender’s Guide spells out a set of procedures to get a condo project approved. According to the VA, “For condominium projects, the lender/sponsor must provide the following to the VA Office of Jurisdiction:

•       A written request for VA-approval.
•       A copy of the condominium’s organizational documents.”

That means it is the lender’s responsibility to submit documentation to the VA on the borrower’s behalf. It’s not a simple matter of sending in the organizational documents and waiting for the VA’s response–condo documents must be reviewed to make sure they comply with VA regulations, and “approved by VA before any lots or units in the project are eligible for VA loan guaranty.”

Once the review of the documents has been completed, the VA notifies the borrower of its decision to approve or deny. When a project has been approved, the VA may have a list of “special conditions/requirements which must be met prior to VA guaranty of an individual loan in the project.”

Those conditions may include a pre-sale requirement, and restrictions on VA loans based on the completion of the project (including common areas and other issues that could affect condo conversion or construction projects). A condo may be denied VA approval or have the approval process suspended based on “deviations from VA requirements,” incomplete documentation, inaccurate or inconsistent information submitted or other factors.

That may not be the end of the issue–the VA approval process could be revisited pending receipt of additional information required by the VA.

Borrowers and lenders should know VA rules include favorable treatment of condo projects already approved by another government agency. “Generally, projects already approved by the Department of Housing and Urban Development or the United States Department of Agriculture (USDA Loan program) do not need further VA review.

“Upon receipt of evidence of HUD/USDA approval, such as a copy of the HUD/USDA approved project list or the project approval letter, the VA office of jurisdiction adds the project to the nationwide VA list without issuing a formal VA approval letter.”

According to the VA Lender’s Guide, some condo projects approved by other agencies may not be acceptable to the VA. “In rare cases, HUD or USDA may approve a project that VA discovers does not comply with VA regulations.”

VA rules don’t permit exceptions in these instances. “In those cases, VA notifies the lender as soon as practicable that it will not guarantee loans in the project.”

  1. James Kederis

    Will VA approve loans, if condo doc's have "first right of refusal" by condo asso.?

    • Joe Wallace

      Hi James, thanks for your question. Any language in a condo agreement that could be in violation of the Fair Housing act would make that project vulnerable to being denied--FHA, VA loans and other government-insured loans don't allow discriminatory or potentially discriminatory clauses. According to one VA Lender Training Guide, "Two of the most common reasons for VA not approving a Condominium are leasing restrictions and/or the Right of First Refusal. If the association is willing to have the restrictions removed and the documents amended the condominium project may be approved." Hope this helps!

  2. Dawn Smith

    Aloha Will VA give a condo complex approval if two of the units are still leasehold, the remainder are fee simple? Mahalo, Dawn

    • Joe Wallace

      Hi Dawn, thanks for your question. According to VA loan rules, "Property involving a less than fee simple ownership (for example, leaseholds, cooperatives, ground rental arrangements) is not eligible for appraisal without prior VA approval of the specific legal arrangement or project." Hope this helps!

  3. Carolina Small

    Hi Joe, Question # 1: Would VA approve a condo that doesn't have capital reserves. Instead they do assessment if the project needs anything to be repaired/fixed. Question #2: Where do I send all the paperwork for VA to approve the condo? The Regional Office related to the state? Thanks kindly, Carolina

    • Joe Wallace

      From the VA official site: "VA no longer reviews PUD organizational documents to determine acceptability. The lender is responsible for ensuring that both title and lien-related VA regulatory requirements are met. Refer to VA Lender's Handbook, Chapter 16; Section 16-A.01 lists the applicable requirements. Condominium organizational documentation must be submitted for review to the C&V section, at the VA Regional Loan Center having jurisdiction. Refer to Lender's Handbook, Chapter 16; Section 16-A.03 lists the required documents. 3. Must a condominium project be approved by VA before a single unit is eligible for VA Loan Guaranty? The condominium must be approved by VA before any lots or units in the project are eligible for VA loan guaranty." More info is at: You can also get additional information on local/regional requirements which may apply at

  4. Kate

    Hi there! we are currently looking at buiying a house and found the one for us. the problem is, it has been listed as a "site condo" and therefore needs VA approval. i am wondering how long this process will take? thank you so much!

    • Joe Wallace

      Approval time varies depending on a variety of factors--best advice would be to ask your lender what's typical in your market in such circumstances.

  5. Rich

    I see that a condo project in our area is listed as approved (in 2008) by VA, but due to owner occupancy limitations (under 51%) it is not approved by HUD for FHA financing. Should I be concerned that VA simply hasn't updated their website? Or perhaps VA doesn't have the same owner occupied requirements as FHA? Thank you.

    • Joe Wallace

      It's true that VA and FHA loan program requirements can and do differ in many areas. If you're concerned about a condo project in your area, best advice--contact the VA Regional Loan Center with jurisdiction in your area to double-check. You can find the VA RLC nearest you at

  6. Zach

    Was looking on the va's website at list of condos approved in my area. What exactly does "suspended" mean on the status part of the detailed description underneath a condominium community?

    • Joe Wallace

      Have you spoken to a VA rep about this? Contact the VA at 1-800 827 1000 for further assistance.

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