FHA Condo Approval Specialist: VA Condo Approvals – Leasing Restrictions

VA Condo Approvals – Leasing Restrictions

VA Condo Approvals – Leasing Restrictions

va condo approvalIn processing VA condo approvals, leasing restrictions are typically the limiting factor of whether a condominium project is eligible for approval.  FHA has some tough regulations on allowable leasing restrictions, but the VA allows even fewer.

From a leasing restriction standpoint, if FHA’s tolerance is comparable to a picky eater, the VA’s tolerance would be like someone living only on Mac N Cheese.  …But for good reason.

According to Chapter 16 of the VA’s Lenders Handbook (VA Pamphlet 26-7), the VA doesn’t allow:

1. Right of prior approval of either a buyer or tenant.  Like FHA, the VA doesn’t allow third-party or Board approval of buyers and tenants.  This violates a unit owner’s ability to dispose of the unit as the owner sees fit.  For FHA, this is called “free-assumability”.

2. Any minimum lease term in excess of 1 year.

3. Leasing restrictions which amount to unreasonable restrictions on use and occupancy of a unit.  This language is fairly vague; what constitutes “unreasonable restrictions”?  It was written that way on purpose.

Numbers 2 and 3 above fall into a similar category and have the same basis.  The VA doesn’t allow any type of restriction that can impede the Veteran, Reservist or Active Service Member from leasing the unit in the case of deployment.  This is the main impetus behind the VA’s strictness regarding leasing restrictions.

These may rule out many condominium projects nationally, but it protects our soldiers and Veterans in the case they are mobilized to protect our nation.  I have no problem with this.

For the remainder of the year, ReadySetLoan Condo Team LLC is offering free processing for VA condo approvals for all condominium clients who retain us for an FHA condo approval.  If you have questions about VA or FHA condo approvals, please contact us for a free consultation.

The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA.  We have assisted nearly 200 condominiums and we can help your association.

 

ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.

 

Please contact us with any questions regarding FHA or VA condominium project approvals.  You can email me at askeric@readysetloan.com or call me at 404-433-4565. I will be happy to answer any of your questions.

 


FHA/VA Condo Approval Specialist

404-433-4565 Cell Phone

860-644-3772 Fax Phone

eric.boucher@readysetloan.com
ready set loan condo team

 

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Comment balloon 9 commentsReadySetLoan Condo Approval Team • June 18 2014 03:03AM

Comments

Who examines the condo docs to see if they qualify Eric?

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) about 4 years ago

Hi Conrad - in-house VA Staff Appraisers who work in the Regional Loan Centers.  Legal documents are also sent to attorneys who review them to verify that they meet the state laws in the states in which they reside.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) about 4 years ago

Eric I agree with their restrictions.  I don't thing a Condo Association should be able to  restrict an owners rights.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 4 years ago

I agree George, but as with FHA, there has to be a balance between too much control and allowing associations to try to maintain some kind of harmonious balance to the community.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) about 4 years ago

Thanks Eric.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) about 4 years ago

Hi Eric, I have a question. Does this restriction apply to short-term rentals (i.e. vacation rentals)?

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 4 years ago

You're welcome, Conrad.

Hi Bill - according to Chapter 16, the VA does not have a requirement regarding the minimum lease period except that it can't be for more than 1 year.  Does that answer your question?

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) about 4 years ago

I do a large volume of VA loans in Virginia where homes are often too expensive, making condos the home of choice for a lot of my VA clients. Thanks for presenting the information in a way I can easily share with others!

Posted by Paul Collier, Paul Collier (Patriot Home Mortgage) about 4 years ago

I'm glad that the information was helpful to you, Paul.  Please don't hesitate to contact me if you or your clients have questions about VA project approvals.

Posted by ReadySetLoan Condo Approval Team, The FHA/VA Condo Project Approval Specialists (ReadySetLoan Condo Team LLC) about 4 years ago

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