The Department of Veteran Affairs has announced a major change that will waive the condo approval process for homes built as site condos in Michigan. This change will open up the availability of homes for VA loans and speed up the home loan process.
Effective immediately, site condominiums in the state of Michigan will be processed in the same manner as a single family detached residence.
Nearly all new single-family homes in Michigan are built as site condos which were previously required to be approved as if it were a condo complex. These extra requirements caused an unnecessary burden on veterans applying for VA loans in Michigan.
Effective May 24th, 2018, the Veterans Association will now recognize site condos as single family residences. These changes make it easier for veterans to qualify for VA Loans.
What is a Michigan Site Condo?
A site condo is defined as a single-family detached home that was built in a development under a Master Deed with agreed upon covenants, conditions and restrictions or CC&Rs. No part of the house or land is considered common area, however, the association may collection Home Owners Association dues for amenities that are outside the bounds of the property.
What are the benefits of Site Condos in Michigan?
Many new home developments in Michigan are built as Site Condos where the home and land are owned and maintained by the individual owner and the common areas are maintained by the condo association.
Just like condominiums, site condos may have amenities such as pool areas and recreational facilities. Additionally, the roads to the individually owned properties are maintained by the association. The costs of these amenities are split among the association members in the form of Home Owners Association Dues (HOA dues). The costs of the dues will vary from association to association.
Why does Michigan have Site Condos?
In 1978 the Michigan Condominium Law was passed which allowed for quick approval of home developments on private property. Since then, the majority of new single-family residences have been classified as “site condominiums” (site condos).
This classification allows developers to build neighborhoods faster and more efficiently because they utilize private roads and common areas that are paid for by the association members.
Do VA Loans need Site Condo Approval in Michigan?
With Michigan’s VA site condo changes, Military Veterans will now be able to use their VA Loan benefits to purchase Site Condos in Michigan without having to go through the VA condo approval process.
The condo approval process would previously require books of documentation and up to two months for review making it nearly impossible for a small site condo neighborhood to be eligible for VA financing.
Moving forward, Veterans will have a wider selection of homes that they can purchase using VA Home Loans. Veterans can now pick a home and close quickly.