Why is it Difficult to Find VA Approved Condos in Orange County?

va approved condo for sale

Why is it difficult to find VA approved condos in Orange County, CA? There are plenty of Veterans in Orange County who want to take advantage of the VA loan program, especially now that there are no more loan limits for ZERO Down VA financing. But trying to narrow down the search for those condos that are VA approved, meaning they are eligible for VA financing, is no easy feat.

First, it's important to understand the difference between a condo and a Single Family Detached home. In Orange County it is not always as easy as just looking at the property and knowing if it is a condo or an SFR. Most people assume that all condos are attached properties on at least one wall, tend to be smaller homes, and have a monthly Home Owners Association (HOA) payment. And they also assume an SFR (Single Family Residence) will be a detached property, larger home, and not have an HOA payment. But this is not always the case.

Condos that Look Like SFR's

While some condos look like a stereotypical condo, some do not. Many times, especially in the last 10 to 20 years, builders have developed and built detached home projects that are legally condos in an effort to achieve more "density" in the project, meaning, build more homes on the parcel of land. The homes are detached. They look and feel like a Single Family Detached home, or even a Planned Unit Development (PUD), but legally they are a condo.

Orange County VA Approved Condos

Single Family Homes that Look Like Condos

And then there are the home projects that look like condos but are legally SFR's.  These properties are attached and have HOA dues. Typically they are older projects. You'll run into these in all areas of Orange County.

Full Proof Way to Know if a Property is a Condo

There is a full proof way to know if a property is a condo. Check out the Assessors Parcel Number, or APN. In Orange County, if the APN begins with a "9", then the property is a condo. A lender or real estate agent will be able to look up the APN number, but as a consumer you can typically find it in the property listing information. For example, Redfin.com lists the APN number in the "Public Facts" section of the property page. Zillow shows it in the "Other" section lumped together with about 50 "other" details. A little harder to find. Realtor.com shows the APN in the "Other Property info" section. 

While many of the listing sites may identify a property as a "condo" or a "SFR", there are times when the information is incorrect. The agent entering the information didn't realize the significant difference in financing possibilities based on the legal property type, so knowing the rule of "9" is important. And if the APN does not begin with a 9 then your are good to go with your VA loan. But if there is a 9 and the property is a condo, then you will need to narrow down your search a little bit more, because to get a VA loan on a condo, the condo project needs to be VA approved.So how do you figure out which condos are VA approved and which are not?

Finding VA Approved Condos

If you are a Veteran looking to buy a condo using the VA loan program, then you are not going to want to waste your time looking at condos that are not VA approved. You can find a real estate agent who can help with your search. Or, you can go straight to a website built specifically for finding Orange County VA approved condos. There are two websites in Orange County, CA that will drastically narrow down the search for VA approved condos, saving lots of time, energy, and frustration. 

www.OrangeCountyVeteransHomes.com

www.OrangeCountyVeteransHomes.com has links for just about every city in Orange County. Just click on the link for the city you are interested in and "bam", you are presented with a list of VA approved condos for sale. They are listed in order of purchase price. Any Veteran who has spent any amount of time looking at condos only to find that a property they fell in love with is not VA approved will appreciate the this website. And while it is still important to have a local Orange County VA Loan Officer who is familiar with Orange County VA approved condos double check a properties eligibility before you make an offer, just knowing you are not wasting your time looking at condos that are not VA approved is a big time saver.

Fully Underwritten PreApproval

The first step in any home search should always be a consultation with a lender. For those using the VA loan program, working with a local, Direct VA Lender who is purely focused on the VA loan program and also knows the in's and out's of VA condo lending can help make the whole home buying process a smooth process. Your VA lender should be available to answer your questions and should be quick to present your loan options in an easy to understand way. And most importantly, it can be critical to understand the difference between being "Prequalified", "PreApproved", and Fully Underwritten and PreApproved. If your lender issued your PreApproval letter 1 hour after running your credit and getting a "DU", then you probably do not have an "underwritten" VA PreApproval. VA loans fall apart all the time when the Veteran thought they were PreApproved. Unless an actual Direct Endorsed VA Underwriter has reviewed your loan package, then you are still at risk of having a rocky loan process once your offer is accepted. The best recommendation that can be given to a Veteran early in the home search process is to get your VA loan fully underwritten and approved. This not only will give you peace of mind, but will also make any offer you make solid gold to the seller. A fully underwritten and PreApproved offer is as good as a cash offer and will make it easy to close very quickly. 

Authored by Tim Storm, an Orange County, CA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at Fairway Independent Mortgage Corporation NMLS #2289. My direct line is 714-478-3049. I will prepare custom VA loan scenarios that will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process.

How to Buy a Condo in Orange County with a VA Loan

Are you looking to buy a Condo in Orange County, CA with a VA loan? There are things you need to know before starting the condo search that will help speed up the search process and relieve the potential frustration of finding out the condo you fell in love with is not eligible for a VA loan. The most important thing to know right out of the gate is that if you are using VA financing to purchase a condo, the condo project needs to be VA approved. And while it is possible to get a condo project VA approved after you have identified the condo you want to buy, it will be far easier to just limit your property search to only those condos that are in a VA approved condo project. But how do you do that?

Two Ways to Search for VA approved Condos

There are two common methods used by Veterans and their real estate agents in searching for a VA approved condo. The most common method is to just look at ALL condos for sale and narrow down the search to the condos the Veteran is most interested in buying. Typically the search will be based on price range, bedrooms, bathrooms, size, location, etc. After filtering through 100’s of properties, anywhere from 3 to 30 properties may be identified as potential condos to buy. Then comes the frustrating part. Looking up each condo to see if it is eligible for VA financing. Since most condos in Orange County, CA are not VA approved, finding out that most of the homes are not even eligible for a VA loan is not only frustrating but a huge waste of time.

The far easier method is to only look at condos that are located within VA approved condo projects. And this is where it makes sense to work with real estate professionals who are familiar with the VA loan program and understand how to limit the search to only those properties eligible for a VA loan. The real estate agent can search the Multiple Listing Service (MLS) based on a narrowed down search of legal “Tract” numbers. The resulting properties are then forwarded to the Veteran, saving a ton of time (and frustration).

Another option for Veterans who want to do some searching on their own is to use a local VA Condo search website specific to Orange County.  www.OrangeCountyVeteransHomes.com has done most of the legwork for you. There is a link for each city within Orange County. Simply click on the link and Bam, it’s done.  For example, let’s say you are looking for VA approved condos in Irvine. By clicking on the Irvine link, a list of VA approved condos in Irvine will appear. As of today (Nov 19, 2020), there are 49 VA approved condos for sale with prices as low as $305,000 and as high as $1,030,000. A quick search for VA approved condos in Huntington Beach shows there are currently 20 properties for sale with prices ranging from $279,000 up to $800,000.

It is important to have an experienced Orange County VA loan specialist double-check the VA website to make sure the condo project is verified as approved because sometimes a condo project can run into financial issues or a lawsuit that can jeopardize their approval.

Buy VA Condo with $0 Down with No Limit in 2020

In 2020 VA will do away with loan limits for 100% financing. In the past, a Veteran would buy a home with ZERO down payment but only up to the county limit. In Orange County in 2019 the 100% financing loan limit was (is) $726,525. It was possible to buy a property and get a VA loan above that limit, but only with a down payment. Now, as a result of the “Blue Water Navy Veterans Act”, loan limits have been eliminated. This means that those high priced condos in Irvine and Huntington Beach, along with other upper-end areas of Orange County, a Veteran can buy with No Down payment.

First Step in the Home Buying Process –VA Loan PreApproval

The first step in every home buying process should always be PreApproval. The last thing you want is to spend time finding the right property and then not be ready to make an offer. Most sellers will not accept an offer from a potential buyer who hasn’t talked to a lender yet and have a PreApproval letter in hand. With VA, it is important to work with a lender who specializes in VA. It is a unique program and working with a local Orange County Loan Officer who specializes in the VA loan program will help to make the overall process seamless. The VA Loan Officer will be able to pull the VA Certificate of Eligibility (you always want to make sure eligibility is clear before an offer is accepted), along with providing a Side by Side VA Total Cost Analysis (VA TCA). The VA TCA will give the Orange County Veteran a thorough breakdown of the numbers, making it easy to compare different options and price ranges.

Authored by Tim Storm, an Orange County, CA Loan Officer specializing in VA Loans. MLO 223456. – Please contact my office at Fairway Independent Mortgage Corporation. My direct line is 714-478-3049. I will prepare custom VA loan scenarios that will be matched up to your financial goals, both long and short-term. I also prepare a Video Explanation of your scenarios so that you are able to fully understand the numbers BEFORE you have started the loan process

Can a VA Loan PreApproval be done in 5 Minutes over the phone?

orange county va loan preapprovalVA loan PreApproval should not be confused with a verbal “Prequalification” over the phone. The most important and first step in the home buying process is to find out the price of the home you can afford. Ultimately the price will be determined by a combination of things, including how much money will be needed for the home purchase, the borrowers credit score, income (as shown on the tax returns), debts, and the Veterans payment comfort level. And while a 5 minute call to a lender is a good start, an actual PreApproval will take more than a brief phone call.

There are some mortgage websites that allow the borrower to print out their own PreApproval letter based on information they enter into an online form. The letter is available without a loan officer or underwriter reviewing any documentation.  This is scary, because in today’s underwriting environment there are hundreds of potential issues that can arise during the loan process. Things that someone outside of the mortgage industry may not even think is an issue could be a deal killer if not dealt with prior to having an accepted offer to purchase a home.

VA loan PreApproval can be a fairly quick process depending on whether there are complications with the loan. Below are a few things that could cause serious headaches for the home buyer if they were to come up after an offer is accepted.

  • Depositing cash into an account to be used for closing costs. While depositing cash may sound like it’s not so bad, it can actually be disaster. All funds for closing a purchase need to be documented and come from an acceptable source. Cash cannot truly be documented. It could come from anywhere and with no paper trail . It could be a loan from a friend, which would not be acceptable. It could be a credit card advance, which would also not be acceptable. If you are planning to deposit cash into your bank account, discuss this with you loan officer prior to the deposit.
  • Paying off an old collection account just prior to making an offer on a home. This sounds like a good idea, and the lender may even need the collection to be paid off prior to closing. But paying off an old collection will “update” an old derogatory item on your credit report, which could lead to a lower FICO score. Your lender may suggest holding off on paying the collection until the loan is officially in process and a credit report with an acceptable FICO score has been pulled. The lender can have the credit bureau do a credit supplement during escrow to verify the account is paid off.
  • Closing credit card accounts prior to offer acceptance. Depending on your current FICO score, closing old credit card accounts could actually lower your FICO score. This is because those old accounts show that the borrower has a history of credit, hopefully in this case “good” credit. By closing the account, it will no longer be updated in the credit report, and the borrowers score could drop due to a lack of history.
  • Shopping for condos that are not on the VA approved list. There  are ways to find VA approved condo’s that will save time if you are working with a local Orange County VA Loan Officer.

What is Needed for VA Loan PreApproval?

A more thorough review of the Veterans documentation will be needed before an offer to purchase is made if the odd’s for a smooth transaction are to increase. The VA lender will want to see the following items:

  • Paystubs for the most recent 30 days. For a self employed borrower, a Year to Date Profit and Loss statement.
  • Federal tax returns for the most recent two year time period, including all schedules. For a self employed borrower, the lender will also need their business tax returns for the most recent two years.
  • W2’s, 1099’s, and or K-1’s (self employed) for the most recent two years.
  • Bank statements for the most recent two months, including all pages (even if the last page is blank – if the first page shows “1 of 5” then provide all pages. The lender won’t know the last page is blank unless they have it in hand).
  • DD214 – this will be used by the VA lender to retrieve the Certificate of Eligibility. The Certificate of Eligibility will verify that the Veteran can use the VA program to finance their home. Making sure the Veteran’s Eligibility is in place prior to an accepted offer is very important.

The lender may also ask for additional items depending on the Veterans situation. Items like a divorce decree, bankruptcy papers, or documentation to back up derogatory items on a credit report will be needed. Also, if there are deposits that are not payroll related on the bank statements, then documentation to prove the deposits are from acceptable sources will be needed. Knowing this and already clearing these types of conditions will result in a very smooth and stress free closing. And no, this can’t all be done in 5 minutes. But it can be done quickly if you’re working with a loan officer who is dedicated to the VA loan program.

Authored by Tim Storm, a California Mortgage Loan Officer MLO 223456 – Please contact my office at the Emery Financial. Direct line at 949-640-3102. www.OrangeCountyVALoans.com

Why Get PreApproved for a VA Mortgage?

Orange county real estate agent va financingThe real estate market in Orange County, CA is hotter than its been in years making mortgage PreApproval more important than ever. There are more people looking to purchase a home, and all price ranges, than at any time since before 2008. This has lead to competition for the limited supply of homes on the market. So who is getting their offer accepted?

Mortgage PreApproval is more important than ever!

The more prepared a potential homebuyer is the better chance they have of getting an offer accepted. What does it take to be prepared for a home purchase in Orange County, which is such a competitive market? The first and most important step is to get PreApproved. Homebuyers need to know BEFORE they start searching for a home what they can actually afford. They should have a budget in place and have a good idea of how much total mortgage payment they can afford.

The mortgage payment is made up of more than just the principal and interest. Buying a home also means paying property taxes and home owners insurance. And if the property is in a Planned Unit Development or is a condo, then Home Owners Association dues also need to be factored in. The best way to know these numbers is to consult with a local Orange County mortgage lender.

What your Orange County, CA VA Specialist Loan Officer Can Do for You

A good Orange County loan officer who specializes in VA financing will be able to not only answer questions regarding the loan and home buying process, but also prepare custom loan scenarios that will have the full details of a real estate transaction. The loan scenarios should show the purchase price, loan amount, required down payment, closing costs, and prepaid expenses. The scenarios should also show the full payment breakdown.

The VA specialist loan officer should also be able to show the home buyer scenarios that the buyer actually qualifies for, at least based on the initial verbal consultation. To get PreApproved the lender will need the borrowers income and asset documentation. Items such as recent paystubs, two years W2’s and tax returns, and bank statements. The lender will need a completed loan application and will also run credit.

Not all home buyers are financially ready to buy. But the PreApproval process will give them the road map to getting prepared. Whether they need to work on their credit, save more money for down payment, or adjust to the type of home they are shopping for (or neighborhood), just knowing for they can buy is very important.

Closing a VA Loan in Orange County in 30 Days or Less is Easy

Closing a VA loan in Orange County in 30 days or less is not only possible, but is easy. But for the loan to close this quickly, all parties involved must be ready to react quickly to requests from the lender.

What Needs to Happen For a 30 Day VA Loan?

  • Borrower – it helps tremendously if the borrower has already met with an Orange County Direct VA Lender and has a PreApproval in hand. If the borrower is already PreApproved for a VA loan, then the lender should have tax returns, paystubs, bank statements, loan application, and credit. The lender may need to update the file with new paystubs or bank statements, but PreApproval will give the lender a good head start in closing the deal quickly.
  • Real Estate Agents – The lender will need the complete purchase contract and any counter offers, as well as escrow company contact information. The Orange County VA lender needs this information so they can contact escrow immediately.
  • Escrow Company – The lender will send the “Initial Fees Worksheet” to the escrow company, along with the lenders contact information. The lender needs to receive the Estimated HUD-1, also known as the Estimated Closing Statement, from the escrow company prior to completing the Good Faith Estimate and loan disclosures for the borrower. The appraisal can’t be ordered until the lender has sent loan disclosures out, so receiving the Estimated Closing Statement from escrow is an important step in closing escrow in 30 days or less.
  • Appraisal – The VA appraisal is ordered by the lender through the VA Portal. It can take anywhere from one to two weeks to receive the appraisal from the day it is ordered, so the lender needs to order the appraisal as soon as possible.

If there is a break in the chain, if one of the parties involved in the transaction causes a delay, 30 days can quickly turn into 35 or 40 days. For this reason, the lender should have a timeline mapped out and make it clear to all parties that items needs to be received quickly. An experienced lender can pull off 30 days VA loan closings almost every time as long as everyone works as a team.

VA Loan PreApproval is the First Step

The first step is to get PreApproved for a VA loan before making an offer on a home.  Finding an experienced VA loan officer who works with a Direct VA lender in Orange County is important. While it is easy to find VA lenders on the internet, Orange County has some very experienced VA loan officers. Also, it can be helpful to meet face to face with the loan officer and get all of your questions answered.

Authored by Tim Storm, an Orange County, CA  VA Loan Officer – Please contact my office at Home Point Financial for more information about an Orange County, CA home loan.  949-640-3102. MLO 223456

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Call our office today and see how we can help you and your family. Ask for your Free First Time Home Buyer Report.

tstorm (at) ochomebuyerloans.com