VA Mortgages remove many barriers to homeownership and allow eligible servicemembers and veterans to buy a home more easily. VA mortgage rates are lower than those of most other loan types. The VA mortgage is simply the best way to buy a home. Why? Because with a VA mortgage:
No down payment is required
No mortgage insurance is required.
You get a great interest rate.
More lenient credit guidelines are available to you.
VA mortgages are an amazing benefit available only to current and former US armed forces service members who meet eligibility requirements. In 2017, the VA mortgages will continue to be one of the most popular benefits of the VA.
If you plan to buy a home with a VA mortgage loan, you should know about VA’s minimum property requirements, or MPRs.
Here is what you need to get a VA Mortgage.
MPRs are the minimum standards that the home needs to meet for VA to accept the loan. If the home does not meet MPRs, it will need to be repaired to these standards, or the loan will not be approved.
The overall goal of MPRs is to ensure the home is safe, sanitary, and structurally sound. Also, that it meets local standards for a permanent home. If it’s a new construction home, it must meet the local building code as well as HUD requirements.
That’s a high-level view. So let’s get into some detail on what all that means in a real-life situation.
VA mortgages have a couple basic requirements that you probably won’t have any problem with, as you will most likely weed out such properties that don’t have adequate spaces for
Cooking and dining
Or without safe, reliable mechanical systems that appear to be in working order and will continue to function after you purchase the home.
Any homes without these basic amenities should be passed by, whether or not you get a VA Mortgage because the home is simply not going to suit an individual or family.
Heating and Electricity
Homes with a wood burning stove also need to have a backup heating system that can sustain the home temperature at 50 degrees. Why 50 degrees? Because it’s well above the point at which water pipes can freeze, burst, and flood the home.
Solar systems that heat water or living space must be backed up with conventional methods.
Check VA loan rates and get a free quote.
The VA requires the home to have electricity in all areas of the home for lighting and equipment.
The home must have its own water heater as well as safe, potable (drinkable) water. The home must also have a working septic system. Whether it’s a public or private system, meaning city sewer or septic tank, it has to work properly.
Homes with a well instead of a community or public water system may require a water quality analysis to ensure that the water is safe to drink. No matter which kind of financing you choose, it’s a good idea to obtain a water analysis on an individual well prior to buying the home.
Homes on a community well will be required to prove that the community system is of adequate size for a number of homes served, and that water will be delivered at a reasonable cost going forward.
Roof and Crawl Space
The roof must not leak, which is common sense. However, the VA Mortgage also requires the roof to have viable life left. If there is doubt about the roof, expect the VA Mortgage underwriter to require a roof inspection, which is different than a home inspection or appraisal. It’s a dedicated roof report that states that the roof has a certain number of years of life left. If there’s not enough life left, the roof will need to be replaced.
The crawl space, or “crawl,” is the space underneath the floor. The crawl must be accessible, clear of debris, and properly vented. An unvented crawl causes the wood underneath the house to rot. If left unchecked, rotting support beams underneath the home can cause structural damage. Likewise, the attic must be vented.
Utilities and Multi-Unit Homes
If you’re looking at a 2- to 4-unit home, you’ll want to know that laundry and storage space can be shared between the units. Water, gas, sewer or electricity may be shared by multiple units under the same VA Mortgage, provided there are separate shutoffs for each home unit.
Access to the Home
The VA mortgages require the home to have an adequate access either by foot or car from a public or private street. The access has to be a viable one year-round.
For multi-unit homes, each unit must be accessible without trespassing through another unit or another’s property.
Defects and Deterioration
The property must be free of defective construction or decay. The VA appraiser will search the property for such items, along with evidence of any wood-destroying insects. Termites and the like can cause expensive and dangerous damage to the foundation of a home.
Lead-based paint is another big issue for VA mortgages. If you are looking for homes built prior to 1978, there’s a good chance the appraiser will request paint repairs. This is because the appraiser must assume that a house of this age has lead-based paint. Any paint defects like chipping or peeling must be repaired, as this is a lead poisoning hazard.
It’s fairly common for older homes to have less-than-perfect sections of the exterior or interior paint. Luckily, this is not a difficult or expensive repair. If the defective section of paint is not too big, a paint contractor can often scrape, prime, and re-paint the area fairly quickly and cheaply.
However, there’s a chance that the surface itself is deteriorated. In this case, the siding or interior wallboard will need to be replaced, along with the paint. This could get more expensive.
Location of the Home
One aspect of a home that a veteran may not think about prior to making an offer is regarding the geographical location and the surrounding characteristics. If the home itself is located on a gas or petroleum pipeline easement, it may not eligible for VA mortgage financing. The easement is the area surrounding the pipeline, a buffer for utility crews to access and work on the pipeline.
If the home structure is located within 220 yards on either side of the pipeline (the pipeline itself, not the easement), a letter will need to be written by the pipeline company stating that the pipeline is compliant with certain codes.
Likewise, there are restrictions against the home being too close to high voltage electric lines. The structure or outbuildings may not be within the electric line easement (buffer area). This rule doesn’t refer to standard street power lines, but large, high voltage transmission lines.
Manufactured homes must meet the standard MPRs of standard homes, with a few additional requirements. The home must be permanently affixed to a foundation that is adequate for the load of the home. In addition, manufactured homes in certain geographical locations may require special ties and bindings to resist hurricanes and earthquakes.
Most manufactured homes will require a permanent skirting, which is a continuous metal or wood enclosure around the foundation. In addition, most manufactured homes need a
Who Pays for Repairs?
If repairs are needed, such as paint repair, roof repair, etc., it is ideal if the seller makes the repairs at his or her own cost prior to closing. If the seller has no money to do the repairs, perhaps the real estate agents involved can find a way to make the repairs. If there’s no way to complete the repairs, and they are required to obtain VA mortgage financing, you may have to back out of the deal and find a better home.
It is not advisable for the veteran to pay for repairs out of his or her own pocket prior to closing. Say, for instance, you pay for $5000 in repairs and then your loan is denied for some reason. You just spent a lot of money fixing up someone else’s house.
Nor is it advisable to accept promises from the seller to make repairs after closing. For one, your lender will not close the loan if the home has VA mortgage deficiencies. Second, all bets are off once the loan closes. The seller won’t have any interest to make the repairs at that point.
Do I Need a Home Inspection?
Even though you have a VA appraisal, you should get a home inspection too. A VA appraisal is a little more thorough than an appraisal for a conventional loan, however, it does not replace a home inspection. A home inspector will check aspects of the home that are outside of the VA appraiser’s purview. To avoid costly repairs in the future and to give you confidence in your purchase, get a home inspection.
Why Enforce Minimum Property Requirements?
All these requirements may seem to be an extra burden on veterans trying to obtain VA mortgage. However, it’s quite the contrary. The VA does not wish veterans to be strapped to a home that is not livable or will be too costly to maintain or repair.
Spending too much on home repairs can jeopardize on-time mortgage payments each month. Likewise, high-dollar repairs on a home could leave the veteran with no choice but to walk away from the home and be foreclosed on. That’s not good for the VA or the veteran.
So if you find a home, but discover it doesn’t meet VA’s MPRs, it’s best to see if the seller can repair the home, or simply find a new home that is in better condition. After all, the purpose of MPRs is to get the veteran into a superb home that comes with little worries for years to come.
If you still have questions about VA mortgage loans or MPRs, contact one of our VA mortgage experts at 801-403-9774 or simply complete our online request. A loan officer will go the extra mile to make sure your question is answered.
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