The Department of Veterans Affairs wants military service members and Veterans to use their VA loan benefit to buy homes that are safe and in good condition.
VA Minimum Property Requirements (MPRs) are specific conditions that a property must meet to qualify for a VA loan. VA minimum property requirements protect homebuyers by ensuring that they’re purchasing move-in ready homes.
To qualify for VA loan financing, a home must meet all minimum property requirements set by the Department of Veterans Affairs. The VA wants to ensure that the property you’re purchasing is:
These conditions, known as the three “S’s,” must be met prior to closing. To make sure your new home meets minimum requirements, a VA home appraiser will inspect the property before your loan closes as a part of the VA appraisal process.
The VA appraisal does not replace a standard home inspection – there are many important differences between VA appraisals and home inspections and both are recommended. Instead, a VA appraiser will evaluate the property looking for common issues that don’t meet the three S’s.
|Core VA Home Requirement
|Is the home safe?
|Broken windows, Lead-based paint, Missing handrails
|Is the home sanitary?
|Unsafe drinking water, Rotting wood or mold
|Is the home structurally sound?
|Foundation issues, Roof in poor condition, Termites or Wood-Destroying Insects
Neither the VA appraisal nor the standard home inspection can guarantee that a home is free from all defects. But these assessments help reduce the risk to you by catching any potential defects that are visibly evident.
VA appraisers have a detailed list of MPRs that need to be checked during the VA appraisal, like the following:
Your lender will alert the VA when it’s time for the VA loan appraisal to be ordered. The VA will then assign an approved VA appraiser to evaluate the property as one of the last major steps before closing.
Now that we know what VA appraisers are generally looking for on their MPR checklist, let’s take a closer look at issues that could potentially lead to a VA inspection failure.
Homes don’t need new roofs to meet VA MPRs. But the roof does need to be in good repair, with no major damage or leaks. It must be in good enough condition to “provide reasonable future utility,” which means that there's no indication that the roof needs to be replaced anytime soon.
If the VA appraiser has concerns about the roof, a roof inspection can be ordered to estimate how many more years the current roof will last. If the roof needs to be replaced in the next few years, the VA might require replacement before you purchase the home.
The crawl space is the area under the floors of many homes. This space needs to be accessible, clear of debris and ventilated correctly. Without proper ventilation, the wood support beams under the house can rot and lead to structural damage.
The entire home must be wired for electricity so that lights and equipment can be used in every area of the house.
Similar to the roof, the electrical and climate control systems don’t need to be new, but they need to be functional and should last for several years after you move in. Heating systems must sustain temperatures of at least 50 degrees to ensure residents' comfort, and to prevent water in the pipes from freezing and potentially bursting.
Air conditioning isn’t required in all regions. But where it is present or necessary for residents in that area, it must meet certain requirements. For example, if the air conditioner is more than 25 years old, it doesn’t have enough life left, even if it’s currently functioning. So the AC unit would need to be replaced to meet MPRs.
Solar-powered HVAC and water heating systems are allowed by VA guidelines, but they must have a conventional backup method in place.
The home must have access to safe drinking water, as well as its own water heater and a functional septic system. This can be either a city sewer hookup or a septic tank.
Homes that are part of the public water system are deemed to have safe drinking water, except in the rare event of an area-wide water table problem. If your chosen home has private well water, a water quality analysis may be required to confirm that the water is safe to drink. And if your chosen home is on a community well, you will need to show that the supply meets the needs of the community being served and that water is available to the community at a reasonable price.
Water damage can weaken ceilings, walls and floors. Poor drainage can generate mold growth, which can lead to health problems. So any sign of water intrusion will be a red flag to VA appraisers.
Gutters, downspouts and drain pipes should be properly installed and in good repair to carry rainwater away from the structure. The land surrounding the house should be properly graded to allow water to flow off the property. Water puddles on the property are a sign of a drainage problem, which needs to be addressed before you can close on the house.
One of the best features of a VA loan is that you can use it to purchase a multiunit building (up to four units), as long as you live in one of the units. But multifamily homes have additional MPR considerations.
First, common area laundry facilities and shared storage space must be accessible to all units. It’s fine if the utilities (like water, gas, sewer and/or electricity) are shared between multiple units, rather than having each unit on its own meter. The important VA requirement is that each unit has its own shut-off system, separate from the other unit(s).
The house must have year-found accessibility from a public or private street, by foot or car. This means that mountain cabins, for example, where roads are impassable during the winter season, cannot qualify for a VA loan.
Additionally, if you are considering a multiunit property, each unit must have separate access to the street. Properties that require the resident of one unit to cut through another unit’s private space don’t qualify for a VA loan.
Homes built before 1978 are assumed to have lead-based paint, which was standard at the time. We now know that lead-based paint is a potential health hazard. So VA loan home requirements are strict about paint.
If lead-based paint might be present, any chipping or peeling of the paint must be repaired to avoid possible lead poisoning. In most cases, this is quick, easy and affordable item repair. The affected area simply should be scraped, primed and repainted.
It’s also possible that the painted surface is damaged and needs to be replaced. For example, if a home's wooden, painted siding is damaged, the siding itself might need to be replaced for the house to meet VA MPRs.
As we’ve mentioned, mold is a serious health hazard, so the VA appraiser will be on the lookout for any sign of active mold.
The appraiser will check for signs of water intrusion, which includes a visual inspection of the ceilings for possible roof leaks, the areas around doors and windows for improper sealing, and the walls for possible leaky pipes. The VA appraiser will also check the pipes under cabinets to make sure they are leak-free as well.
Mold remediation can be simple if the area is accessible and the infestation limited. But it can also be a difficult, invasive process that requires ripping out drywall and replacing compromised studs if the damage is extensive.
Manufactured homes are prefabricated and largely assembled off-site, before being moved to the land they will occupy. VA loans can be used for manufactured homes, with a few additional home requirements.
For example, VA MPRs require that the structure be permanently fixed to an appropriate foundation. Furthermore, the connection to the foundation must be “skirted” by a continuous, water-resistant enclosure. Manufactured homes might also require additional measures to protect the structure in case of natural disasters, like hurricanes or earthquakes, depending on the region.
Wood-destroying insects (like termites), as well as rot and fungus, can comprise a home's structural integrity. The VA appraiser will search for any sign of termites, rot or other potentially threatening pests. If signs of damage are evident, the VA appraiser might order a separate pest inspection specifically to pinpoint the extent of the infestation and damage.
If there is an active infestation, pest control will need to eliminate it before you can move forward with the purchase. Any material damage from the infestation will also need to be repaired before the VA loan can be funded and the purchase completed.
If a home fails to meet the VA loan home requirements, you have three options:
This is generally the best option for properties that don’t initially meet VA loan property requirements. The house might just be a few quick repairs away from meeting the MPRs, allowing you to secure your VA loan and close on your new home. In most cases, repairs need to be made before the loan can be funded.
In rare cases, the VA can waive an MPR, allowing you to close on the house. But your lender would also have to approve this waiver. Getting the waiver and the lender approval is a process, and there is no guarantee that it would be granted or approved. Even with an approved waiver, this process would likely delay your closing.
By purchasing the home with a temporary bridge loan, you can move in immediately, even if the property fails to meet VA loan property requirements. Then you would replace this bridge loan with a VA loan once the property is brought up to VA minimum standards. As you can imagine, this creates a lot of additional steps because you need to qualify for another loan type, then swap that financing for a VA loan at a later date.
You can negotiate with the sellers to decide who will pay for repairs. But it’s far easier for everyone if sellers will agree to pay.
You’ll have extra leverage in your negotiation with the sellers for repairs if you’re in a slower real estate market. But many sellers are willing to cover repairs for VA buyers as a token of appreciation for their service to the country. So don’t hesitate to ask the sellers to fund the repairs.
Could you pay for any repairs? While some lenders won’t allow Veteran borrowers to pay for repairs, others do allow this. But this method requires additional paperwork, which could potentially delay the closing.
MPRs may seem like an extra hassle in an already-complicated homebuying process. But the intention behind VA loan home requirements is to provide military service members and Veterans with safe housing and sound investments in real estate. MPRs help ensure that buyers applying for VA-backed loans end up with livable housing that is in good condition.
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† ICB Solutions is a division of Neighbors Bank, which is an affiliate of Mortgage Research Center, LLC dba Veterans United Home Loans.