On the island of Oahu, condominiums come in a huge variety of shapes and sizes. On Oahu, the median condo price in February was $415,000, as opposed to a median price of $789,000 for a single-family home. Just because a home is a condo, does not mean that you have to sacrifice size, a yard, or even that your home will be attached to another! That's because on Oahu, developers have figure out how to condominium land instead of just units in a building. What might surprise you is that every home pictured below is considered a condo! With your VA loan benefit, you increase your buying power and potential greatly when you consider purchasing an Oahu condo.
What is Considered a Condo?
The technical term for a condo is Condominium Property Regime (CPR), and refers to the type of ownership rather than a physical dwelling. In a CPR, you own a 'condominium unit' (the physical dwelling) and a percentage of interest in the common and limited common elements of the CPR project. A lot of the time you might not be able to tell if a property is considered a condo just by looking at it. CPRs range from apartment style units, townhomes, and detached single family homes.
So then, how can you tell? Well, a knowledgeable real estate agent will definitely be able to tell you. But you can also look at the MLS number of the home. If the last 4 digits of the MLS number are anything besides 0000, then it is a CPR.
How Do I Buy a Condo With My VA Benefit?
You CAN use your VA loan benefit to purchase a CPR, and it can be just as easy as buying a single family home. There are a few conditions that the CPR must meet, however with a knowledgeable real estate agent and lender, these conditions can be a breeze to navigate.
1. The CPR must be on the VA approved list: Just like with a single family home, the VA wants to make sure that you are moving into a safe, livable home. The VA has compiled a list of CPRs that have been approved for purchase with the VA home loan benefit. You can go online to view this list by clicking here. All you need to know is the name of the CPR. But beware! This list can be a bit misleading - often the CPR name on the list does not exactly match the name of the CPR. But again, a knowledgeable realtor and lender will be able to navigate the site and tell you whether a CPR is approved or not.
2. If the CPR is not approved, do not worry! Just because a CPR is not on the approved list does not mean that you definitely cannot purchase it using your VA loan benefit. You can apply to have a condo put on the list, and the process can take anywhere from a few days to about a month. So it is important to know the status of the CPR before you get into contract, so that the realtors and the lender can account for the approval process in their timelines. This process does not require much from the borrower, but the seller and their realtor have to cooperate and get the documents together in a timely manner to help the process along.
Once a CPR has been approved for one buyer, it goes on the list so that the next VA buyer does not have to get it re-approved. This status is good until there is a change in the building, the legal standing of the CPR (e.g. if there are litigations, low reserves, or upcoming assessments).
After it has been determined that a CPR is VA approved, the loan is processed as usual. If everything is in line with the property, there is no reason why purchasing a CPR should take any longer than purchasing any other type of property. In fact, our Oahu Military Real Estate team has closed a number of CPR purchases in 30 days or less!
For further information about buying a CPR in Oahu with your VA benefit, please feel free to contact us.