USDA Condo Approval: How does a condo get USDA approved?
Last week we discussed how a condo that is approved by Fannie Mae, Freddie Mac, FHA, or VA would be eligible for a USDA loan, but what if a condo is not already on one of those lists? Today I’ll review the steps required in order to gain USDA condo approval.
Now, because these types of existing condo approvals can be extremely limited, today we are going to discuss how to get a condo approved for a USDA loan and walk through the necessary steps.
As a helpful tool, you can download our USDA Condo Approval Checklist with the link below and remember we are here as a resource, so let us know if you have any specific condo approval questions along the way.
USDA Condo Approval
As a starting point, it is critical to make sure the homebuyer is able to get properly qualified for a USDA loan and that the condominium is located in a USDA eligible area.
Step 1
First, we will obtain the most recent budget and balance sheet from the condominium homeowner’s association (‘HOA”) in order to determine if the replacement reserves are at least 10% of the budget.
Step 2
After that has been initially reviewed, the following items will be requested from the HOA:
- Completed condo project questionnaire (provided by Metroplex)
- HOA Rules and Regulations
- Evidence of:
- Liability Insurance & Fidelity Bond coverage
- Master Hazard Insurance Policy
- Flood Insurance, if applicable
- Additional documents may be required depending on the condo association
Final Steps
- Once the appraisal is received, condo approval is finalized
- As the approved lender, our underwriter then submits the file to USDA
- After USDA commitment is received, the closing process beings
Key Reminders
In summary, remember that because of the various factors, a USDA condo approval will be case by case depending on the facts of each association and while what we have covered today is a recommended process, additional steps may be needed to determine final condo eligibility.
Having a condo as an eligible property type can open up additional inventory and more affordable options for buyers in a variety of price ranges and we are here as a resource to guide you down the USDA Condo Approval path and help navigate the process.
Thank you for making us your USDA lender of choice and remember to just call or email to discuss your scenario and let us show you the “Metroplex” difference!
(800) 806-9836 X280
SeanS@MPLX.org
As always, I want everyone to make it a great day and look forward to seeing you right here for the next tip of the week!
P.S. – You can download our “USDA Condo Approval Checklist” by CLICKING HERE
