There will be no VA loan limits in 2020, which is big news for Orange County, where condo prices have often been higher than the VA loan limit.
What does this mean for Orange County Veterans hoping to buy a home with no down payment? It means they will no longer be limited based on the purchase price of the property they want to buy.
Will this really affect Condo Buyers?
The newer areas of Orange County, especially some properties near the coast, sometimes look like single-family detached homes but are legally condos. A quick search of VA approved condos in the city of Irvine finds 8 “condos” currently for sale (as of November 5, 2019) that are priced above the 2019 Orange County VA loan limit. The highest price “condo” in Irvine looks very much like a single-family home and is priced at $970,000. A Veteran buying that property based on 2019 VA loan limits of $726,525 would need a down payment of $60,860. If the Veteran waits to close escrow in 2020 when the VA loan limits are eliminated will need $0 down payment. This eliminates what can be a barrier to entry for some home buyers who have good income but do not wish to deplete their savings.
VA Loan PreApproval BEFORE Making an Offer
Purchasing a home is not easy. Especially with VA financing, it is important to get PreApproved for your VA loan before making an offer on a home. As part of the VA Loan PreApproval process, the lender will pull the Veterans Certificate of Eligibility (COE), which verifies whether the Veteran has enough Entitlement for the home purchase. Quite often the lender can retrieve the COE within minutes. But sometimes it’s not so easy and the last thing anyone wants is to find out there is a hang-up with VA loan eligibility after getting an offer accepted.
As part of the PreApproval process, the lender will also review income documentation, credit and assets before issuing loan approval. The VA Loan Officer will also (or should be able to) go over several different loan scenarios with the Veteran to make sure the numbers will fit in the budget. A home buyer does not want to jump into a purchase without having a thorough understanding of the numbers. The mortgage payment is made up of more than just Principal and Interest. There are also property taxes, homeowners insurance, and in the case of a condo, Homeowners Association Dues. Depending on the price of the home, the “TI” portion of the PITI can add over $1,000 to the monthly payment.
Is it Difficult to Find VA Approved Condos in Orange County?
Now that the Veteran is approved, the fun part begins, right? Searching for a home can be as easy as clicking on properties for sale, looking at photos, and then contacting your Realtor for help viewing the properties and making an offer. But in the case of VA financing and condos, it is important to understand that the condo you buy must be in a VA approved condo complex. And there are not many real estate agents who know how to quickly determine whether a condo complex is VA approved. It is common for the listing agent to have no clue. And even when asked they will defer to the management company of the Homeowners Association, who also does not know in more cases than not. VA condo approvals can be 10 or 20 years old in many cases. If there hasn’t been a recent VA buyer in a complex, then without some research, the assumption may be made that a complex is not approved. This is where it is important to be working with Orange County real estate professionals who specialize in VA buyers and financing.
By limiting the condo search to only those condos that are already VA approved, the condo search for a Veteran will be far easier, faster, and less stressful. This is why using www.OrangeCountyVeteransHomes.com as your home search website, your timeline for finding a VA approved condo will be much shorter than for someone who searches ALL Condos in Orange County and then has to figure out which condos they can purchase with a Zero Down VA loan.
Authored by Tim Storm, an Orange County VA Loan Officer specializing in the VA Loan program. MLO 223456. – Please contact my office at Fairway Independent Mortgage Corporation. My direct line is 949-829-1846. www.OrangeCountyVALoans.com. I will prepare custom VA loan scenarios which 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.
