From attics to zoning, VA home loan property requirements (MPRs) are important for protecting military homebuyers and their home purchases.
VA loans are one of the best mortgage product for homebuying, hands down.
With a zero-down* option, no monthly mortgage insurance, and rates you may not be able to find with a Conventional loan, there’s a lot to like in VA loans.
But nothing’s perfect.
VA home loan minimum property requirements (MPRs) can cause delays when buying a home.
Here’s your complete guide to VA MPRs, including what to do if you hit a snag.
VA home loan minimum property requirements are there to protect military homebuyers.
These requirements ensure he or she is buying a safe, structurally sound, and sanitary property. It’s not good for anyone if a veteran buys a lemon of a house.
For instance, say you purchase a home and your child is injured after falling off a deck with no railing. Or, you discover a $50,000 foundation problem shortly after closing on the house.
These are the kinds of situations the VA is trying to avoid.
As bothersome as MPRs can seem, a day may come when you are glad they were there.
You will be subject to property requirements for any loan, so unless you pay cash, you can’t buy some properties without meeting certain requirements.
The VA home loan property requirements are not much more difficult to meet than those of FHA loans. But there are some situations where the appraiser would “look the other way” for a conventional loan, but call for repairs for a VA loan.
It all comes down to the property. VA is particular about some things. For instance, one requirement says that no part of the residential structure can be within a high voltage electric transmission line easement. Some loan types might not be that specific, but VA loans are.
Every property is different, so, sure, there will be some that you look at that won’t fit within VA’s requirements. In those cases, keep looking.
In other cases, you can find a way to solve the deficiency via repairs before closing.
The appraiser will note anything outside of VA guidelines on the appraisal. The lender will review the appraisal and require that necessary repairs be made prior to closing the loan.
If the lender requires repairs, the seller may not want to do them. It can be tempting to offer to do the work yourself. Technically, this is allowed for most repairs. The lender just wants to see that the repair is done.
However, we don’t recommend this for many reasons. First, you could put in a lot of work on a property that is not yours yet. Then, the seller could end up selling to someone else. Additionally, you could get hurt doing the work.
It’s always best if the seller arranges for the work to be completed by a licensed contractor.
In fact, VA requires a licensed contractor to do some types of work, such as repairing an AC unit or correcting a cracked foundation.
Work with a loan officer and a real estate agent who has experience guiding VA borrowers through the mortgage process.
These professionals will have a good idea of whether the home will meet VA MPRs. They will advise you not to make an offer on a home that clearly won’t pass.
That way, you can spend your time only visiting homes that have a good chance of being approved, rather than getting your heart set on something you won’t be able to buy.
The following is a list of MPRs for VA loans. While it’s a fairly comprehensive list based on VA’s own rulebook, it’s not meant to cover every situation or to override individual decisions by a lender or the VA. Rules change frequently, and VA lenders can add requirements onto VA’s base guidelines, so check with your lender if there are any questions about a property’s eligibility for VA financing.
Without further ado, here’s the A to Z list of VA home loan minimum property requirements.
The home must be accessible year-round from a public or private street. The street must be maintained by a public entity, or there must be a maintenance agreement in place.
Access to the backyard must be uninhibited by another unit or someone else’s property, unless there’s a legal agreement (easement) to do so.
Wind, geothermal, or solar energy equipment will be evaluated as to their acceptance in a given market. Leased systems add no value to the home.
The appraiser must note the effect on the home’s value due to noise from the airport for any properties in such areas. The appraiser must use comparable sales with similar noise levels when determining value. Proposed construction in a Clear Zone/Runway Protection Zone is not eligible for a VA loan. For existing homes in such zones, the VA homebuyer must sign an acknowledgment.
While the appraiser is not required to climb into the attic, they do view attic spaces via the attic access, when available. Visible defects such as a water-stained ceiling or bad ventilation will show up in the appraisal and must be repaired prior to closing the loan.
Dampness or structural problems will be reported on the appraisal. Sump pumps are not required, but if there is one, it must be hard-wired or use a factory electrical cord and suitable outlet.
A quick-release must be installed in at least one window per bedroom unless there is also an exterior door in the bedroom. This is required for fire safety reasons. If no working quick-release mechanism exists, the appraiser will call for the burglar bars to be removed prior to closing.
In some communities, the local housing authority may require upgrades or removal of non-permissible features upon sale. In these cases, the appraiser must note the needed repairs and make the appraisal subject to them.
The appraiser will view the crawl space when accessible, but is not required to enter. The crawl space must:
If there are no systems in the underfloor and it’s properly vented, it does not need to have adequate clearance for entry.
Any condition that impairs the safety, sanitation, or structural soundness of the property must be repaired. The VA home loan can’t be closed until all issues are addressed.
Some of the items the appraiser will look for are:
This is not an all-inclusive list, though. The VA appraiser will note any other defects if they pose a risk to inhabitants or home value.
There must be proper drainage so that water flows away from the property and there is no ponding of water on the property. The appraiser will also report potential mudslides and other precarious geologic situations around the property.
The appraiser will note any unstable soil, sinkholes and other dangerous soil conditions.
High-voltage electrical transmission line easements must not run under any part of the residential structure. Additionally, any outbuildings will not receive any value if they are located within the easement. The appraiser must comment on the appraisal if any part of the property (not just the structure itself) is within 100 feet of the high-voltage line easement.
The VA appraiser will report any situation in which a neighboring structure is partially (or fully) constructed on the subject property’s land or vice versa.
The appraisal will note any impact on value from potential environmental problems. Items include buried storage tanks, oil and gas wells and, chemical contamination, including from former meth labs, soil contamination from off-property sources and other issues. If any such issues are found, the appraiser will issue the report subject to clean up to local, state, and federal standards.
Properties in FEMA flood zones require flood insurance. However, a home is ineligible if the appraiser deems the area subject to regular flooding, regardless of its Special Flood Hazard Area (SFHA) status.
Homes located within Coastal Barrier Resources System areas are not eligible for VA loans. CBRS areas are buffer zones between oceans, the Great Lakes, and other areas that protect inland areas from storm surges.
Homes located in Zones 1 and 2 are not eligible for VA loans. Properties within a lava flow hazard zone, but not within Zones 1 and 2, may be eligible, but the appraiser must note the zone information in the appraisal and determine its effect on the home’s market value.
Heating systems must be installed so they can keep areas with plumbing heated to at least 50 degrees to avoid bursting pipes. In mild climates, heating may not be required.
A licensed HVAC contractor must certify that any non-vented, non-electric heaters are equipped with an approved oxygen depletion sensor (ODS) that meets local code.
Air conditioning is not required, but any installed AC units must be functional
Homes or improved portions built in 1978 or later are not presumed to have lead paint. Chipping or damaged exterior paint must be repaired to protect the home from the elements. Interior paint is considered cosmetic and usually does not need to be repaired for structures built in this time period.
The appraiser will assume lead paint exists in homes built before 1978. Chipping or damaged paint must be repaired. Affected areas must be scraped/brushed and thoroughly cleaned to remove all loose paint, then repainted with two coats of modern non-lead paint. If the surface can’t handle full removal of the paint, it must be completely covered with gypsum wallboard, plywood or other suitable material before it’s repainted.
Leases or reservations that may grant rights for excavation or other damage to the property must be noted on the appraisal. The appraiser will report how such leases may affect property value or usefulness of the property if the rights are exercised.
The manufactured home must be considered real estate in accordance with state law and be permanently affixed to a foundation. Single-wide manufactured homes must be at least 400 square feet and double-wides must at least be 700 square feet. However, lenders may require larger square footage.
The home must comply with all codes and building requirements.
Modular homes may be considered conventionally built homes, but the appraiser must ensure that all running gear is removed, the crawl space has an adequate vapor barrier and vented masonry skirting with adequate access to the underfloor, and the home is on a permanent foundation. There may also be other requirements.
It’s okay if the property has different characteristics such as being more than one parcel, large acreage or divided by a road or waterway. In these cases, the appraiser will make a decision on whether this house can be easily resold if needed.
Non-standard house styles like log homes, earth-sheltered houses, and geodesic domes must meet building codes and be marketable in the area.
The appraiser isn’t required to test any systems in the home. However, he or she will call out any obvious defects in heating, electric and other systems in the home.
Leased mechanical systems, such as propane tanks, alternative energy systems and other items, will not be given any value in the VA appraisal. Furthermore, leased systems may even detract from value if they required a lien or other encumbrance on the title.
Properties with non-residential use, such as a small business on the property, may be eligible, at least according to the VA. Lenders may not allow it. In any case:
In the appraisal, VA will give no value to the business aspects of the property.
No part of the residential structure can be located within a high-pressure gas or liquid petroleum pipeline easement, nor will any value be given to any outbuildings within the easement. The appraiser will comment if any part of the property (not just the structure) is located within 100 feet of such an easement.
The VA recommends testing for radon gas. For new construction, the builder must certify that the home was built to local radon control standards using radon-resistant construction.
It might seem obvious, but VA guidelines call for the roof to keep out moisture.
Additionally, the roof must be projected to keep out moisture in the future. No number of years is specified by VA.
The appraiser is not required to climb on the roof. It’s his or her best guess as to roof condition, especially when it’s not visible, like when there’s snow on it. In those cases, the appraiser will observe whether there are leaks inside. The appraiser is permitted to use a drone if the roof is not visible.
Side note not from the VA guidebook: If you have doubts about the roof, schedule a licensed roofer to inspect it. A roof is one of the more expensive home repairs.
The home must have a safe sewage disposal system that does not pose risk to the homeowner or the public. Pit privies are acceptable if that’s the local custom, but they must adhere to local health authority standards.
Community sewage systems must be adequate for the size of the community, provide safe disposal, conform to local requirements and be under a legal agreement for maintenance.
The home must easily accommodate:
Above ground or buried flammable material storage tanks with greater than 1,000-gallon capacity must be reported on the appraisal if they are within 300 feet of the property. Therefore, homes located close to gas stations or other commercial businesses with such tanks might be affected. The buyer must sign an acknowledgment that he or she is aware of the situation.
Pool equipment can be assumed repairable at minimal cost or in working order if the pool is winterized or even if it contains algae. However, the appraiser must report structural defects like unstable walls or other issues that make the pool unusable. If the pool needs repair, the appraiser can’t just ignore that it’s there. The appraisal will be prepared subject to the pool being repaired or filled in.
Above-ground pools may add value to the home if such pools are considered customary in the area. The pool must be secured according to local code.
The home must have electricity. However, the electricity does not have to be turned on during the appraisal inspection since the appraiser is not required to check systems or appliances.
Visibly damaged electrical wires must be repaired.
In multi-unit properties, each unit’s utilities must be separate. However, in a 2- to 3-unit property, the units may share water, sewer, gas or electricity if there is a separate shut-off for each unit. Units under separate ownership can share connections from a main source if the connections are under an acceptable easement/agreement. Additionally, there must be a legal agreement in place if repair access is needed from a separately owned unit.
The property must have a year-round supply of drinking water. It also must have hot water, a bathroom and sewage disposal systems.
If public water contains lead, the property must have a central filtering system, and the buyer must sign an acknowledgment.
Water must meet local standards or EPA standards if none exist locally. In some cases, water must be tested by a disinterested third party.
The buyer must sign an acknowledgment when water is provided by wells, springs, lakes, rainwater catch systems or other similar systems or sources.
Shared wells
A shared well is acceptable if it is:
Community water systems must be adequate for the size of the community, provide safe water, conform to local requirements, and be under a legal agreement for maintenance.
Any damage arising from insects, fungus or dry rot must be repaired. Termite inspections are required in “Very Heavy” or “Moderate to Heavy” termite infestation probability, as defined by the below map. Small sheds that are given no value in the appraisal do not need an inspection. Furthermore, units within high-rise condominiums do not typically need a termite inspection.
Any property, whether there’s business use or not, must conform to local zoning. If it does not, but it’s acceptable to the local authority, the appraiser will label it “Legal Non-Conforming.” The value will reflect any effect the status has on the property’s value. The appraiser also must state whether the property can be rebuilt if destroyed.
The VA will consider waiving MPR repair requirements in some cases. Note that the lender may not allow this. Lenders can issue their own rules that are more strict than VA guidelines, so check with your lender if you’re unsure about a property’s ability to be financed.
According to the VA, a waiver will be considered if the buyer signs the request, the lender agrees with the buyer’s request, and the property is safe, structurally sound and sanitary.
To support the MPR waiver request, the buyer is encouraged (but not required) to get an inspection from a licensed and qualified contractor.
If the request is granted, the appraised value may be reduced in lieu of making repairs.
The VA allows the lender to hold back funds to make repairs after closing. However, most lenders probably won’t do this, as the VA won’t guarantee the loan until the repairs are complete. If something goes wrong with the loan during the repair period, the lender’s losses could be huge — a risk most lenders won’t take.
What are the VA minimum property requirements? VA minimum property requirements (MPRs) are a set of rules to ensure the property is safe, sanitary, structurally sound, and adheres to local codes and laws. Most homes that are in decent condition will meet VA MPRs, and homes with defects can still be eligible for a VA loan if defects are corrected prior to closing.
What properties cannot be financed with a VA loan? Most properties can be financed with a VA loan, but properties that don’t meet VA’s minimum property requirements (MPRs) for safety, structural soundness, and sanitary standards will not be approved. Additionally, condo units that are in complexes not VA-approved can’t obtain VA financing.
Can you buy property and build a house with a VA loan? You can, but you may have a hard time finding lenders who will approve these types of loans. Many won’t finance VA construction loans, so you’ll have a better chance at buying an existing home.
Working with a VA lender that knows VA home loans and the minimum property requirements is your first step. Get preapproved** so you know where you stand.
*A down payment is required if the borrower does not have full VA entitlement or when the loan amount exceeds the VA county limits. VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit guidelines, and property limits. **Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation, which has not been reviewed by underwriting. If you have submitted verifying documentation, you have done so voluntarily. Final loan approval is subject to a full underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal. Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway. Copyright©2024Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. Fairway is not affiliated with any government agencies. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Opportunity.
