Minimum Property Requirements and Local Requirements For VA Loans
Every so often a reader leaves a comment or question with a common theme related to minimum property requirements: “My lender is telling me the house I want to buy needs X, Y, or Z. Where does it say in the VA loan rules X, Y, or Z must be present? I can’t find a rule that says so. Is my lender wrong?”
Borrowers in such circumstances are naturally upset at the prospect of having a home loan delayed or denied because the property doesn’t live up to minimum property requirements. It’s logical to look up the rules, and when finding nothing to support the lender’s claim, seek redress because “the lender is wrong”.
But it’s important to remember that VA rules for minimum property requirements have a provision for local jurisdiction when it comes to building codes, property standards and other issues related to the physical condition or location of a home.
According to the VA Lender’s Guide, “If the property is located in a jurisdiction which enforces a State, county or local building code, then VA MPRs require that the construction comply with the applicable State, county or local building code,” as well as federal building requirements.
This means that a lender may require additional steps to correct issues found by an appraiser which are not specifically mentioned in the VA minimum property requirements.
If federal, state, or local codes apply, the borrower will be required to comply with those codes in order to proceed. Whether that means negotiating with the seller to get corrections made, agreeing to make the corrections as a buyer, or following the applicable ordinances as directed, is something which must be worked out in each individual case.
VA loans don’t have a “blanket policy” on such issues–except that where federal, state, or local laws do have jurisdiction with regard to minimum property requirements, they must be followed to get VA loan approval.