Getting to the Finish Line When a Condo Isn’t VA-Approved: The One-Unit Waiver That Can Save the Deal

When a condo project has been denied by the VA for eligibility, many loan officers believe it means a VA-guaranteed loan is no longer possible for that unit. That’s not always true. Under certain conditions, you can request a one-unit waiver for a specific unit in a development—allowing the Veteran to still use their VA benefit for the purchase. Here’s a breakdown of how this option works, why it matters to your file, and how to handle it smoothly.

Why the one-unit waiver matters

• If a condo complex was recently denied (especially within the past two years) by the VA, the Veteran might still be eligible for VA financing if you request a one-unit waiver on their behalf.
• This path often offers the fastest closing option compared with submitting the entire condo project for full VA approval, which can take many weeks.
• As the loan officer, your early identification of this path can help keep your borrower’s timeline on track.

How the one-unit waiver request works

Here are the steps you’ll want to follow as the loan officer:

1. Confirm the condo project was denied by the VA and check the date of that denial.
2. Have the Veteran write a signed letter that acknowledges the denial reason, recognizes they understand the implications, and formally requests the waiver.

• Sample elements for the letter:

“I, (Veteran’s Name), understand the reason(s) for denial for (Association Name), (Condo ID from WebLGY) at (Full Address). I accept and understand the long-term implications of these restrictions. I request a one-time waiver so I may purchase this condo with my VA benefit.”

3. Once you gather that letter (and any other required documentation), submit a service ticket (for example via VA’s Service Now/SNOW system) to the VA’s Construction and Valuation department for review.
4. Monitor the request and keep the borrower informed since even a waiver still requires VA review and approval.

What you need to know about VA approvals and denials of condos

It helps to have a clear understanding of how condo approval works and why a one-unit waiver may be needed:

• For a condo project to be eligible for VA financing, the entire development must ordinarily be on the VA-approved list. (VA Benefits)
• Projects are often denied or show “unaccepted” status if they fail key criteria (such as homeowner-occupancy ratio, delinquent HOA fees, restrictive resale or leasing rules). (The Mortgage Reports)
• The full approval process (for a whole condo project) can take 30 days or more, sometimes much longer depending on documentation and VA backlog. (VA Loans)
• A waiver lets one unit be eligible even though the project overall didn’t meet standard criteria. (FHA & VA Condo Approval by FHA Review)

Best practices for you as the loan officer

• Review the condo’s status early in the process: Check whether the project is already approved, “accepted with conditions,” or denied. Using VA’s condo lookup tools is a must. (Veterans United Home Loans)
• If the project is denied, evaluate whether a one-unit waiver is appropriate rather than immediately steering the borrower away.
• Collect the waiver letter from the Veteran and confirm the project’s denial reason is clearly stated.
• Submit the waiver request promptly including the Veteran’s letter and any supporting documentation (e.g., condo ID, address, association name).
• Manage expectations: Even with a waiver request, approval is not automatic. Keep the borrower informed about potential delays or additional VA requests.
• Ensure compliance: If the waiver is approved, handle the closing as you would any VA-guaranteed loan, but keep in mind the special condition of the unit’s eligibility.

Summary

As a mortgage loan officer who works with Veterans and VA home loans, knowing about the one-unit waiver option for condo projects can make a big difference. When a project has been denied by the VA, this waiver can still open the door for VA financing for a single unit—and doing it right may save your borrower time and help close the loan faster. Keep it on your checklist: check condo status early, prepare the Veteran’s letter, submit the waiver request, and stay on top of the process.