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How to Use VA and FHA Financing to Buy a Condo

Here’s some helpful info for anyone buying a condo with an FHA or VA loan.

Today we’re taking a closer look at how to use VA and FHA financing to buy a condo. If you’re using VA financing, it’s usually a 0% down loan. It’s a great opportunity for those who have served our country to get special financing and not have to come up with a big down payment. FHA financing does require a down payment, but just 3.5%. This program is backed by the government and another great opportunity for buyers who don’t have a ton of savings. 

“You can get spot approval even if a condo isn’t on the approved list.”


Both of these types of financing require a few things:

1. No health and safety issues at the property. The lender would want those things taken care of before they lend on the property. We typically see this more in houses than condos, but things do come up occasionally. Your appraiser will spot any problems and tell you that they have to be fixed before the property is financed.

2. The complex must be approved. What happens if you fall in love with a condo and it’s not on the VA or FHA list? There is a thing called “spot approval.” Not all lenders do this, but we work with one who does. They will take a look at the owner-occupancy ratio compared to the number of tenants in the building, then they look at the financials to make sure there is no pending litigation on the building. Provided that inquiry comes back clean, you can get spot approval and purchase the condo even if it isn’t on the approved list.

Spot approval is a bit of a tricky situation in this hot seller’s market. A lot of sellers don’t want to wait the necessary 45 days for spot approval. However, as long as the rest of the agreement is what the seller’s looking for, it is still possible to get it through. We currently have a VA buyer in escrow who went through spot approval and got their offer accepted.

If you have questions about condo financing, buying a new home, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.

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