Appraisals ordered by the VA protect both the buyers and lenders. To do so, the VA has standard minimum property requirements that a property must meet to be financed with a VA home loan. Appraisals guarantee the home is worth the selling price. They also make sure the property meets both VA and lender guidelines. Chapter 12 in the Department of Veterans Affairs Lender’s Handbook discusses the basic minimum property requirements (MPRs) a house needs to meet in order to pass the mandated VA appraisal.
The basic minimum property requirements are the following:
- Entity: The property must be a single home that is readily marketable.
- Nonresidential use: If a portion of a property is designed or used for nonresidential purposes, that property qualifies for a VA loan only if the nonresidential use does not impair the residential character of the property or exceed 25 percent of the total floor area.
- Space requirements: The property must have the following:
- living and sleeping space
- cooking and dining accommodations
- sanitary facilities.
- Mechanical systems: Mechanical systems in the property must:
- be safe to operate
- be protected from destructive elements
- have reasonable future utility, durability and economy, and
- have adequate capacity and quality.
- Heating: Heating must be adequate for healthful and comfortable living conditions.
- Unvented space heaters and wood burning stoves are permissible under certain conditions
- Solar systems for domestic water or space heating must meet standards in HUD Handbook.
- Solar Heating and Domestic Hot Water Heating Systems and be backed-up 100 percent with a conventional thermal energy subsystem or other backup system which will provide the same degree of reliability and performance as a conventional system.
- Water supply and sanitary facilities: The property must have the following:
- domestic hot water
- a continuing supply of safe and potable water for drinking and other household uses, and
- sanitary facilities and a safe method of sewage disposal.
- Roof covering: Roofs must prevent the entrance of moisture and provide reasonable future utility, durability and economy of maintenance.
- Crawl space: Crawl spaces must be readily accessible, be clear of all debris and be properly vented. Dampness or ponding of water must be corrected for approval.
- Ventilation: Natural ventilation of spaces such as attics and crawl spaces must be provided to reduce excess heat and moisture.
- Electricity: The property must have electricity for lighting and for necessary equipment.
Again, it is important to understand an appraisal is not a home inspection. Meeting minimum property requirements does not mean a home inspection is not needed. Local compliance codes may differ from VA guidelines.
Call a USAVA Lending specialist today to talk about minimum property requirements in greater detail!
