Any property to be purchased with a VA home loan must meet a list of Department of Veterans Affairs minimum property requirements (MPR). The list of MPRs cover a wide range of issues from accessibility to health and safety.
For example, when it comes to street access, the VA rules state, "Each property must be provided with a safe and adequate pedestrian or vehicular access from a public or private street." The rules also add, "Each living unit must be able to be used and maintained individually without trespass upon adjoining properties. Any easements required must run with the land."
Some purchases may require exceptions to the VA MPR list because of geographic variances or other issues that could make compliance impractical or even impossible. Depending on the terrain, construction and location of other properties, a given house may not be physically able to live up to VA requirements. In such cases the VA allows the buyer and lender to appeal in writing for an exception to the minimum property requirements.
These exceptions can't be made for any condition that leaves the property in unsanitary conditions or compromises the structural integrity of the home.
Properties to be financed with a VA guaranteed mortgage should be free of hazards and defects. Any issue that could affect the health of the future owners must be addressed. The same goes for any issue that could "adversely affect the structural soundness of the dwelling and other improvements to the property, or impair the customary use and enjoyment of the property by the occupants." Some of those issues are regional, while others are situational.
Foundation problems, which are common in parts of the country such as Texas, can violate the VA's MPRs. Some settling of a house is normal, but the problem comes when there is evidence of "continuing settlement." The same goes for "excessive dampness." In Louisiana, some dampness might be expected based on humidity factors and other issues. But too much dampness is a potential structural hazard and the property won't pass VA requirements.
Drainage is also an issue. VA rules state that in order to be approved for a VA home loan, a property must be properly graded so the home has, "positive, rapid drainage away from the perimeter walls of the dwelling, and prevents ponding of water on the site."
It's important for the buyer to understand that any minimum property requirements waived by the VA can have a direct effect on both the property value and the amount of the VA home loan. If the VA Notice of Value reflects a lower amount because of the MPR waiver, the amount of the VA loan will reflect that lower amount. These are important considerations to make when it comes to budgeting for a VA mortgage, down payments and other issues that affect the buyer's finances.