Buying or selling a condo in Kirkland and planning to use FHA or VA financing? The biggest surprise for many clients is that the building itself must qualify, not just the borrower. A missing project approval can stall your timeline or force a change in loan strategy. This guide explains what FHA and VA condo approvals mean, how to check a building’s status, what to do if it is not approved, and how to keep your deal on track in Kirkland. Let’s dive in.
FHA and VA condo approval basics
For FHA or VA loans on a condo, the building must meet each program’s rules. That can happen in two ways: the project is already on the approved list, or you secure a new approval or exception for your transaction. FHA allows project approvals and single‑unit approvals. VA relies on project‑level acceptance. HUD expanded single‑unit approvals in 2019 to improve access, but limits still apply.
Why this matters in Kirkland: FHA and VA are important pathways for buyers who want lower down payments or veteran benefits. If a building does not qualify, deals can be delayed while the HOA and lender gather documents and complete reviews.
FHA rules to know
FHA focuses on the project’s stability and risk profile. Key items include:
- Owner‑occupancy: Many existing projects need about 50 percent owner‑occupied units. HUD allows lower percentages only in limited cases and review types. HUD’s 2019 update outlines these changes.
- FHA concentration: FHA generally limits the share of units with FHA‑insured loans to about 50 percent across the project.
- Commercial space: Nonresidential area is usually capped near 35 percent of total floor area.
- HOA delinquencies: Projects with a high percentage of units 60+ days past due often fail review. Many lenders treat about 15 percent delinquent as a practical red flag, and HUD collects delinquency data on its forms. See the federal guidance on budgets and reserves in the Federal Register summary and HUD forms below.
- Reserves and budget: Expect to provide current financials, reserve planning details, and insurance information. FHA approvals require periodic recertification.
VA rules to know
VA maintains a list of accepted condominium projects. If the building appears as accepted, eligible buyers can proceed without a separate unit approval. If not, a lender can submit a project package to the VA Regional Loan Center. Financial documents must be current, and VA may involve Regional Counsel for legal review. The VA Lender’s Handbook is the definitive reference.
What VA looks for is similar to FHA: stable finances, adequate insurance, clear governing documents, and no problematic litigation or investor concentration. Budgets and financial statements often need to be very recent, such as within about 60 days of submission.
Check a Kirkland condo’s status
Use these quick checks before you write or accept an offer:
- FHA: Search the HUD condo database to confirm whether the project is approved. You can start with this FHA guidance summary and lookup link resource on FHA condo guidelines.
- VA: Use the VA online condo search in the LGY hub to confirm if the project is accepted. If the tool is unclear, your lender can confirm with the VA regional office. Start with the VA Lender’s Handbook page for process details.
If the building is not approved
You still have options, depending on program and timeline:
- FHA Single‑Unit Approval (SUA): Your lender can submit HUD‑9991 for a specific unit in a non‑approved project. SUA is designed to be faster and requires fewer documents, but there are limits on how many FHA loans can exist in the same project.
- FHA full project approval: For broader, longer‑term eligibility, submit HUD‑9992 with a full package through HUD Review and Approval Process or through a lender with DELRAP authority. It is more document‑intensive and can take longer.
- VA project submission: Your lender prepares a project package for the VA Regional Loan Center. Legal review may be required. Current, complete financials are essential.
You can review the current HUD questionnaires and instructions here: HUD‑9991 and HUD‑9992 forms.
What your HOA will be asked for
Lenders typically request these items from the HOA or management company:
- Current operating budget and recent financial statements, plus reserve details or a reserve study if available. See the federal summary of reserve expectations in the Federal Register.
- Occupancy counts and a statement of units 60+ days delinquent in dues, which reviewers use to calculate risk. HUD forms collect this “units in arrears” data and many lenders flag about 15 percent delinquent as a practical limit. Reference HUD’s data collection in the HUD questionnaire materials.
- Governing documents: declaration, CC&Rs, bylaws, and amendments.
- Insurance declarations for the master policy and fidelity coverage where required. See a concise overview of FHA condo insurance expectations.
- Any concentration of ownership by a single owner or entity.
- Board minutes and litigation disclosures that could affect solvency or operations.
Common roadblocks and how to plan
Watch for these issues early to avoid surprise denials:
- Low owner‑occupancy or too many investor‑owned units compared with FHA or VA expectations. See HUD’s 2019 guidance for occupancy changes and limits.
- High HOA delinquencies. About 15 percent of units 60+ days past due is a frequent red flag.
- Significant litigation that is not fully covered by insurance, or large uncovered liabilities. The Federal Register summary highlights the documentation reviewers expect.
- Insurance gaps or insufficient coverage for the master policy.
- Excessive commercial space or a condotel‑like operation, which often conflicts with FHA rules. See HUD’s update for thresholds.
Timelines and lender overlays
- FHA Single‑Unit Approval: Industry guidance often reports a final response within a few business days once a complete package is submitted. See this overview of SUA timelines and tips.
- FHA full project approval: Expect weeks to months depending on complexity and whether the review is through HUD or a DELRAP lender.
- VA project review: Timing varies by regional office and legal review. Many submissions take several weeks. The VA Lender’s Handbook outlines the process and documentation standards.
Many lenders apply overlays that are stricter than FHA or VA minimums. Confirm your lender’s specific occupancy, delinquency, and reserve requirements before you go mutual on a Kirkland condo.
Kirkland resources that help
You can pull key public records quickly:
- King County Parcel Viewer and property research tools: Find parcel data and links to recorded plats and declarations for many condo projects. Start with King County property research.
- Washington condominium law: Reserve studies, disclosures, and governance are addressed in state statutes that HOAs must follow. Reviewing these can help you anticipate what lenders will ask for. See RCW 64.34 and related guidance at WA Condominium Act resources.
Next steps for buyers and sellers
For buyers:
- Verify FHA or VA eligibility before you write an offer. Use the lookup tools and ask your lender about overlays.
- Request essential HOA documents early. Budget, financials, reserve study, insurance summary, occupancy counts, and litigation disclosures will save days later.
- If the building is not approved, discuss FHA SUA or a VA project submission with your lender and set expectations for timeline.
For sellers and HOA boards:
- Gather a clean document set. Keep the current budget, recent financials, insurance declarations, and meeting minutes ready for buyer requests.
- Track owner‑occupancy and delinquency rates so you can respond quickly to lender questionnaires.
- Consider full project approval if your building sees frequent FHA or VA buyers. It can widen the pool of qualified purchasers.
If you want building‑specific guidance or help coordinating approvals and documents, reach out. With hands‑on condo expertise and careful transaction management, you can move from offer to closing with confidence. Connect with Terri Agee Smith to plan your next step in Kirkland.
FAQs
What is FHA Single‑Unit Approval for condos in Kirkland?
- It allows an FHA buyer to purchase one unit in a project that is not FHA‑approved, using the HUD‑9991 form and limited project data, subject to occupancy and concentration limits.
How do I confirm a Kirkland building is VA accepted?
- Search the VA condo database in the LGY hub or ask your lender to confirm with the VA regional office; the VA Lender’s Handbook explains the process.
What HOA delinquency rate causes FHA problems?
- Many lenders treat about 15 percent of units 60+ days delinquent as a practical red flag, and HUD collects this data on its condo review forms.
How long does VA condo approval usually take near Seattle?
- Timelines vary by package completeness and legal review, but several weeks is common for a full VA project submission.
Can mixed‑use or commercial space block FHA approval?
- Yes, FHA generally limits nonresidential space to around 35 percent of total floor area, with some exceptions per HUD guidance.
Which documents should I request from my HOA first?
- Start with the current budget, recent financials and reserve details, insurance declarations, occupancy and delinquency summaries, governing documents, and any litigation disclosures.
