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PUDS/Condos - When closing a loan on a new condo or town home, is there a presale requirement that must be meet?

Published 08/09/2012 12:41 PM   |    Updated 08/09/2012 12:41 PM
When closing a loan on a new condo or town home, is there a presale requirement that must be meet?
VA condominium presale requirements are established by the Code of Federal Regulations, 38CFR 36.4360a(c).  The code states "Proposed construction or existing declarant in control.  Bona fide agreements of sale must have been executed by purchasers other than the declarant (who are obligated contractually to complete the purchase) of 70 percent of the total number of units in the project.  Lenders shall certify as to satisfaction of the presale requirement prior to VA guaranty of the first unit loan..."