Veterans and service members seeking a VA home loan should know that properties must meet the Department of Veterans Affairs’ Minimum Property Requirements (MPRs) in order to satisfy both the VA and lenders. The VA put MPRs in place to try and help safeguard borrowers from purchasing properties that are not safe, sound or sanitary.
An independent VA appraiser will assess the property and point out MPR needs. This is not to be confused with a home inspection, which isn’t required but almost always a good investment. It’s also important to note that the VA doesn’t guarantee a home is free of problems or defects.
Still, it benefits prospective VA loan borrowers to be familiar with MPRs. This way, during your home shopping experience you and your real estate agent can spot potential problems for further discussion.
Take a look at some of the broad, general MPR considerations below, but note that the list is not exhaustive. Local codes and requirements will often come into play.
VA loans seldom get used for nonresidential or business property purchases, as the VA designed the home loan program to increase homeownership among service members and veterans. So the MPRs dictate that the financed property is primarily if not exclusively for residential living.
This condition requires VA-loan financed residence to allow the borrower—and his or her family—enough space to live, cook and sleep.
To pass the VA appraisal, properties need clean drinking water, a water heater and working sewage systems. Properties with public water and sewage lines likely don’t need additional testing of the water, but homes with private wells will need to show evidence of safe water.
With the exception of properties in certain warm climates, the VA property requirements state that homes must have a heating system capable of warming the interior to at least 50 degrees Fahrenheit. Solar systems and wood-burning stoves count as primary heat systems, but a backup heat source will be necessary.
Heating, cooling, electric, water and other mechanical systems must be in working order, and stay that way for the foreseeable future. A major MPR is that the property must have functioning electricity.
Roofs must be in good condition and offer “reasonable future utility,” which is a vague description. Lenders will often list a minimum amount of time, in years, they’ll want the roof to last.
Crawl spaces and basements with water or water damage will need repairs. Attics and crawl spaces require proper ventilation to prevent future damage from moisture and mold. The property’s foundation must be stable and leak-free.
VA-loan financed properties must be accessible from the street via an all-weather driveway or permanent easement. The latter simply allows homeowners to cross through another landowner’s property to get to his or her home. Shared or private driveways may require legal agreements concerning use and upkeep.
The VA doesn’t want borrowers buying homes riddled with termites, carpenter bees, or subsequent damage (e.g. dry rot). The cost of a pest inspection is almost always paid for by the seller -- that’s not a requirement, but what is required is that the VA buyer cannot pay this fee.
These MPRs provide VA loan borrowers with a good foundation of what red flags to look for when home shopping. It’s not easy to find homes void of some bumps and bruises. Nevertheless, the fewer VA property requirement red flags you see in a property, the better.
If you fall in love with a house that has property requirement issues, you may be able to obtain exemptions or either have the seller pay to make repairs or pay for them yourself in some cases. Talk with a lender for more information.