VA requirements

Minimum Property Requirements and Local Requirements For VA Loans

October 13, 2011


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.

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One Comment
  1. Bou Cou Dinky Dow

    There are a lot of pissed off vets who feel like they have been ripped off by the lenders because what most first time home buyers don't realize is that most homes do not appraise at the list price and if they want to avoid making such costly mistakes they should go to the county's appraiser web site and see what the estimated just value of the property is. When you discover that the 110k home you like is actually being taxed as being worth 52K You can bet right there that there is something very wrong because my experience has shown that most appraisers will come very close to that estimated value. And usually because they know what happens to houses over time and what years the houses built fail to meet code. This is something that no one discovers until they have lost money for inspections and appraisals (to the advantage of the seller) if not their earnest deposit. I say this because it has happened to me so many times I was ready to give up. My advise to avoid this nonsense is get an older more experienced professional broker who knows the ins and outs of this scam and who will help you to find the right home that is not riddled with code violations because it was made 20 years ago. One that using Core Logic will approximate the actual list price. Brother Vets you need to learn how to side step the doggie pooh that is out there. All vets know there were people waiting to scam them when they were naive green beans and cherries. That story hasn't changed even up to the present day. There are still some unscrupulous people out there that direct you to these types of properties knowing full well you are going to get burned. My experience has shown that it is the younger generation of professionals who are doing this to veterans (especially disabled like me) because they think we don't know what time it is. It is not the appraisers fault for the most part, It's your ignorant or conniving broker. Once you know the rules of the game you can play it well. Brokers are out to make money any way they can but those who are gray haired like to go home without worrying some crazy Viet Nam or Afhani/Iraki vet is not going to roll up on them on their way home. (By the way, act civil even if you are crazy) There is truth you catch more flies with honey but be alert. The housing hustlers are desperate and ALWAYS AVOID A SHORT SALE. Thats an accident waiting to happen. You heard it here first from a 51st LRRP vet

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