VA Lender’s Handbook Chapter 12 Summary
The VA’s Minimum Property Requirements (MPRs) are what set the VA’s appraisal apart from the appraisal process on a conventional loan. The VA’s MPRs are fairly similar to the FHA’s Minimum Property Standards, but have a few differences. If you’ve gotten an FHA loan before, you’ll be very familiar with the process and won’t have too many surprises. Chapter 12 of the VA Lender’s Handbook covers the VA MPRs in a fairly thorough manner. We have an entire series of articles written on Chapter 12 that we have previously published, but to save you time and help you find what you’re looking for, we’ll be summarizing the important parts of Chapter 12 here.
Note on Purpose and Scope of the VA MPRs
Many borrowers don’t understand why they VA has such stringent requirements on homes that borrowers want to purchase; if the borrower is happy with the home, why should the VA be able to put the kabosh on it? It really comes down to the purpose of the VA loan program in general, which is to assist veterans in finding suitable housing at better terms than they could otherwise obtain. The VA does not expect every veteran borrower to be an expert in all things housing, and so they have instituted the VA appraisal to make sure that every property purchased with a VA loan meets a minimum standard of quality and safety. To be frank, the VA’s MPRs are pretty basic, and you probably don’t want a house that violates them in a severe enough way to be ineligible for purchase. Also, as the guarantor of the loan, the VA has a vested interest in the remaining economic life and viability of the property, and therefore has their own interests to protect.
The Basic MPRs
Most of the MPRs apply to all homes that are eligible for the VA loan program. These are very basic things such as having enough space to live, sleep, eat, cook, and go to the bathroom. The mechanical and electrical systems must work and be accessible for repairs as needed. The home needs to have a heating system, domestic hot water, potable water, and a safe method for sewage disposal. See, quite basic. Their requirements on the roof are a bit extreme though…it can’t leak. You also have to be able to access the property without going through someone else’s property, and you have to be able to get into your living unit without passing through someone else’s living unit. The house cannot have defective construction or show signs of poor workmanship, leakage, decay, or excessive dampness. The home cannot have “wood-destroying insects, fungus, or dry rot”. Oh yeah, and lead-based paint is not OK. Such stifling restrictions.
More Specialized MPRs
There are also MPRs that may only apply to some houses and not others. For example, the VA has certain requirements if the house has an individual water supply (such as a well) as opposed to water provided by a utility provider. There are also requirements if the home is served by a septic system as opposed to a sewer system. We won’t go into those here since this is just a summary. If you are interested in more details you can check out the VA Lender’s Handbook, which is available online, or you can check out our articles on Chapter 12. Manufactured homes and manufactured homes classified as real estate have their own MPRs that apply only to them and not other homes. These are mostly to do with the foundation and the structure of the home. The anchoring devices, piers, footings, and concrete slabs must all meet the requirements that the VA has for these types of homes.
Overall, the VA’s MPRs are really not that onerous and are just common sense. For the most part, you really shouldn’t be interested in a home that doesn’t meet the VA’s Minimum Property Requirements, but in the event that you have a house you feel is appropriate for you, and it doesn’t pass the VA appraisal, you can submit an appeal to see if you can get it approved for purchase.