Are you a veteran looking to purchase a new home? If so, you are likely eligible for loans from the US Department of Veterans Affairs (VA) to pay for your mortgage. These loans are used to pay for either townhouses or condominiums.
Did you know loans from the VA offer 100% financing and don’t require monthly mortgage insurance? Due to this, VA loans are the least expensive mortgage loan option available today.
As a veteran, you would definitely benefit from a VA loan.
So if you’re interested in living in a condo or townhouse, there are specific steps you’ll need to follow to buy a VA approved condo. Below we outline the 10 steps you should take to find and purchase VA approved condos.
1) Find housing and property that meets VA requirements
Veterans who want to purchase a condominium with a VA loan will need to look for property that meet standards required by the Department of Veterans Affairs.
The first step in obtaining a VA loan will be to understand these standards and find housing that meet the requirements. These requirements are meant to ensure veterans and their families have safe, structurally sound, and clean housing.
There are minimum property requirements that VA appraisers look for such as heating and cooling systems, sufficient water supply capabilities, hot water system, and safe sewage disposal methods.
Different systems like solar or wood heating systems need to meet certain standards and may even need backup capabilities. There are also roofing and ventilation requirements.
Depending on the climate, there may be a handful of townhouses or condos that do not need a heating system. This will depend on the VA appraisal.
Any issues with meeting minimum property requirements will need to be fixed before a VA loan is approved. If the property and housing fails the minimum property requirements, it will likely not receive financing or loans from the VA.
Veterans viewing a home and considering purchase should also be aware that meeting these minimum property requirements does not replace a thorough home inspection.
You will need to have a home inspection before move-in day to better understand any and all problems with a property. Once you have a list of VA housing requirements, you can start using the VA website to search for approved condos.
2) Use the Department of Veterans Affairs website to search for VA approved condos
Once you understand the VA requirements for condo mortgage loans, you can use the Department of Veterans Affairs website to search for VA approved condos in your neighborhood.
The page where you can search for condos in a particular city or town is located here.
You can search for a summary report or a more detailed report on the available condos or townhouses. Check the second box to make sure you only view VA approved condos.
You can also enter the condo name or ID number to find more information about whether that particular property is approved for a VA loan.
You can then pick the particular regional office the condominium is registered with. The regional offices are usually related to the county you wish to live in.
You can also pick the state, county, and city where you’d like to look for VA approved condos or townhouses. When you search for a city and state, you will see a certain number of records with condominium names and ID numbers.
When looking through the results, you can click on the condo name for more details about that particular housing complex. The information includes condo name and ID, the address, the status, and processing dates of the condo.
For more information about VA approved condos and the process for getting a VA mortgage loan, be sure to contact your local Veterans Affairs office.
The National Resource Directory also has information about VA benefits. For more guidance on VA services and benefits, call 1-(800)-827-1000.
3) Find an effective real estate agent
After you have a general list of VA approved condos or townhouses in the area you want to live, you’ll want to find a real estate agent with good reviews. Make sure to pick a real estate agent with superior sales records.
It will benefit you to work with a real estate agent because realtors can search their local Multiple Listing Service (MLS) to better define and expand your list of VA approved condominiums.
When searching for a real estate agent, there are a few different actions to take. You might consider talking with recent clients of the realtor, according to Bankrate.
You can ask your realtor for a list of recent homes they’ve sold and the clients they’ve worked with. Afterward, try to contact these clients and obtain more information. You can also look up licensing information about a real estate agent.
Call your state’s regulatory body to ask if the real estate agent is licensed and if any disciplinary actions or complaints have occurred. You may also find this information on the Internet.
Take a look at the specialties of the real estate agents you’re interviewing. There are specific certifications that realtors may have such as a residential specialist certification, a seniors real estate specialty, and an accredited buyer’s representative certification.
You will also want to ask your realtor how long they have been working in this business. If they have more than five years experience, they should have enough knowledge to successfully help you buy a home.
There are also certain red flags you should watch out for when choosing a real estate agent. US News & World Report stated that a realtor that works part-time on the side is not the best choice.
Additionally, choosing a family member for a realtor may not work out unless they are specialists in the neighborhood you’re looking to buy a home. A real estate agent who doesn’t know your area is also problematic.
Along with these particular red flags, a realtor that doesn’t usually sell condos or townhouses may be the wrong choice for you. Make sure your realtor knows the market for buying condos.
4) Look into the Department of Housing and Urban Development
Along with the help of a real estate agent, veterans may also benefit from contacting the Department of Housing and Urban Development (HUD). The majority of HUD-approved condominiums are also eligible for VA mortgage loans.
Veterans can use the HUD website to search for condos that are eligible for VA loans. This HUD.gov page provides a streamlined way to find condominiums based on location, status, or name.
The first action to take on the website page is to choose whether to sort condos based on ID number, name, city, state, county, or zip code. Next, you can pick a state in which you wish to live. You can also enter in the ID number, condo name, city, county, or zip code.
Additionally, the website page allows you to enter in the housing status (approved, expired, rejected, or withdrawn) and the beginning or ending dates.
Once you hit enter, you’ll find a list of available condos in your region. You’ll find information on condo names, ID numbers, and addresses.
You will also want to use the VA Amendatory Clause when purchasing HUD homes with a VA mortgage loan. The HUD’s Management and Marketing (M&M) Contractor will need to see this clause if a VA loan is used.
This contractor can adjust the sales price based on the VA appraisal value only if the VA appraisal is equal or higher than the second offer HUD was given as a bid.
After you have picked a real estate agent, be sure to take a look at the HUD website and reach out to HUD representatives. This may help you find condos that are both HUD-approved and eligible for VA mortgage loans.
5) Veterans need a Certificate of Eligibility to qualify for VA loans
In order to get a mortgage loan from the Department of Veterans Affairs, veterans need to provide their VA Home Loan Certificate of Eligibility. This certificate will prove whether a veteran qualifies for a VA-approved condo loan. You will need to first go to this website page to start the process of obtaining this certificate.
On this website page, you will need to go to the eBenefits portal. If you have login information including username and password for this website, click the login box in the top right corner.
If you need to obtain a password and username to log into the portal, you have to click the register box next to the login box in the top right corner. Once you’re there, follow the instructions on the page.
If you come across some issues, you can call 1-800-983-0937 for the eBenefits customer service Monday to Friday, 8am to 8pm EST.
You can also apply for a VA Home Loan Certificate of Eligibility through your lender. The majority of lenders have access to the Web LGY system, which is an Internet-based application platform.
The Web LGY system can determine eligibility and issue you a Certificate of Eligibility in a few seconds. Be aware, however, that not all cases or certificates can be processed through the Web LGY system.
Only certificates with enough data in the VA records can be processed quickly through the Internet application platform. Be sure to ask your lender if you can receive your Certificate of Eligibility through the Web LGY system.
You can also apply for the Certificate of Eligibility by mailing the VA Form 26-1880, which is a request form for this certificate. On the third page of the VA Form 26-1880, you can find the address where to mail the form depending on what state you reside in.
After you obtain your Certificate of Eligibility, you will need find out your credit score.
6) Find out your credit score and get pre-approved for a VA loan
You will need to figure out your credit score in order to see if you qualify for a VA mortgage loan.
According to the Consumer Financial Protection Bureau, you can obtain your credit score from a nonprofit financial counselor, a credit card or loan statement, or by buying a credit score report from a credit reporting agency.
Both auto loan companies and major credit card businesses have been providing credit scores to their customers on a monthly basis. You may be able to find it by logging into your account online or checking your monthly statement.
When looking for a nonprofit financial counselor to find out your credit score, you can speak with HUD-approved housing counselors. These counselors can provide you with a credit score report and help you review it.
There are certain services online as well that provide a free credit score report. Some websites do not charge a price for this services. Other organizations may require a monthly registration fee.
Before you sign up, check whether there is a monthly fee and how quickly you’ll need to cancel your membership before being charged a fee.
Finally, On Q Financial’s Mortgage Consultants pull credit before completing a full mortgage application. If you don’t want to go through this process on your own, working with one of our Mortgage Consultants is a much easier option.
After you have your credit score, you can work on getting pre-approved for a VA home loan. You can fill out an online form here to get pre-approved for a VA loan or call a Mortgage Consultant that specializes in VA home loans at 1-866-677-3279
You will need to have information about your income, taxes, debt, employment, and monthly expenses when filling out the online form for a loan. If you do qualify for a VA loan, a specialist will be in touch.
7) Start looking at VA-approved condos for sale
After getting a VA loan pre-approval, the next step is to actively start searching and looking at condos for sale. Your real estate agent can help you set up viewings of condos or townhouses.
You’ll need to decide what home features are important to you when picking a condo to buy. If you want laundry machines inside your unit or you need a guaranteed parking space, be sure to check out these details when viewing a home.
Figure out how many bedrooms you’ll need and how large of a home will sustain your family. Take a look at the size of closets, cupboards, and other storage facilities at each condo.
Take a look at different styles of homes including ones with gym facilities, explains the publication Style at Home. Be sure to purchase homes on the larger side based on your finances since bigger condos are easier to resell.
Pick out a condo with an attractive view both for everyday life and resale value. Ask the condo association about visitor parking since you may have friends or family popping in for a visit. Check out the condition of the lobby and common areas as well.
The Penny Hoarder suggests to take a second look at a home before deciding to buy. You should also get a home inspection done. Check appliances very carefully before buying a condo. If something needs to be replaced, take a look at appliance costs online.
If you find minor issues, remember that you could take on home improvement projects by yourself. This could allow you to save money on the cost of the condo.
However, if a home improvement project is costing more than anticipated, take a look at less expensive, alternative ways to repair your home.
8) Make an informed offer on a condo
After you have spent time looking at different condos and picked one you want to purchase, the next step is to make an informed offer on the VA-approved condo.
When you begin bargaining on the cost of the home, find out whether the current market is favorable for the seller or buyer. According to MarketWatch, you should ask your realtor how much the condo would cost on the open market if sold.
You may also want to make sure that the monthly condo maintenance fees are in line with charges of other condominiums in your town or city. You will want to start with a low offer when buying a condo unit.
Start with around 75 percent of the asking price, recommends MarketWatch’s Dan Barnabic. While you may think that such a low offer won’t stand a chance, you never know unless you try.
You may find the condo owners are having financial difficulty or want to sell the condo as soon as possible, which means they may agree to a lower offer. Try to avoid getting into a bidding war if there are multiple offers on a property.
Sometimes brokers or realtors try to create a bidding war situation in order to maximize their commissions. Instead of getting into a bidding war and upping your offer, consider walking away and choosing a different condo to put an offer on.
Try to be patient and spend enough time picking a condo at the right price. Do not rush into buying the condo, but work with your realtor to get the right offer.
9) Review and negotiate the counter offer from the seller
After you have made an informed offer on the condo, you are likely to get a counter offer from the sellers. Next, you’ll need to review and negotiate the counter offer. You may need to check your state laws regarding multiple counter offers, says The Balance.
In most areas, sellers can counter more than one offer. Be aware that even if you accept a counter offer, the seller does not have to go forward with your acceptance.
You will want to work with an experienced real estate agent because multiple counter offers can become tricky and overly complex. As the buyer, be aware that counter offers often have an expiration date.
If you are satisfied with the counter offer, you should accept the offer and quickly deliver your acceptance back to the designated party.
You’ll also want to be aware that sellers can accept another offer while you are trying to decide whether or not to move forward with your counter offer. So you’ll want to accept a counter offer in a timely manner.
If the seller did accept an offer from another buyer, your counter offer will be withdrawn. On the other hand, if a seller tells you that they are looking at someone’s counter offer, you can submit a list price offer to obtain your home.
Often when a seller is looking at other bids, a list price offer will bring the seller to accept your bid. Once you have accepted the counter offer, you’ll want to meet with your lawyer to sign the contract.
10) Meet sign the contract for sale
After you accept the counter offer on your condo, you realtor will draft an offer to purchase. Around this time, you will want to get a real estate lawyer involved if your state requires it.
Getting a lawyer makes the process easier as they’ll be responsible for ensuring you receive a clear title. They’ll conduct a title search to find all pertinent information and records about the property you’re buying.
The lawyer will hold all documents needed for the transaction between the buyer and seller. Your lawyer will be there to represent your interests with the seller and their representation.
Make sure you have a home inspection completed before you sign the contract for sale. Your attorney would then begin preparing closing documents. You will need to have all the paperwork you’ve gathered throughout the home buying process.
Be sure you have mortgage documents, proof of title search, the sales contract, and proof of homeowner’s insurance. You’ll need picture identification to complete your purchase. You may want to do a final walk-through of the property.
Approximately one week before the closing date, you will need to meet with your attorney to sign purchase documents and mortgage documents to close the sale. You’ll need to bring the down payment funds with you to this meeting.
Once that’s done, you can receive the house keys and start moving in! By following these 10 steps, you will be able to successfully find and purchase a condominium with the help of a VA mortgage loan.