VA guidelines

VA Loan Minimum Property Requirements: Are There Exceptions?

November 20, 2018

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VA Loan Minimum Property Requirements: Are There Exceptions?

The Department of Veterans Affairs has a set of standards for all properties to be purchased with a VA-insured home loan.

The VA will not approve loans for buildings or property that doesn’t meet its Minimum Property Requirements (MPRs). For example, a home may not be approved for a VA loan if it lacks:

•  domestic hot water
•  a “continuing supply of safe and potable water” for drinking and household use
•  sanitary facilities and safe sewage disposal.

There are other requirements connected to building codes, safe construction, high-voltage easements and more, but the bottom line is that the VA has set standards for the properties it considers acceptable for VA loans. But are these standards flexible? Can a borrower get a waiver on MPRs if needed?

In some cases the answer is yes.

A section in the VA Lender’s Guide titled “MPR Variations and Exemptions” states, “VA may agree to modify the MPRs where justified by certain conditions common to a particular geographic area or occurring on the site, or where such conditions make compliance impractical or impossible.”

This does not mean the VA will automatically overlook a known safety issue or obvious problem, but a borrower ask the VA to review a specific circumstance to consider an MPR waiver.

According to the VA, “MPR for existing construction can be waived by the VA field office if a veteran is under contract to purchase the property, and

•  the veteran and lender request the exemption in writing
•  the property is habitable from the standpoint of safety, structural soundness and sanitation
•  VA is satisfied that the nonconformity has been fully taken into account by way of depreciation in the VA valuation.”

The key to getting a VA MPR waiver is, as you can see from the above, that the condition being waived does not negatively affect the safety or habitability of the property. Conditions that do get a VA MPR waiver may reduce the value of the property, a situation that may require the borrower to re-negotiate the sale price or pay the difference between the sale price and the approved VA loan amount out of pocket.

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10 Comments
  1. OSCAR P. ESTIOKO

    I am 100% permanent and totally disabled veteran with a monthly compensation of of over $6500.00. I lost my home last year(conventional loan) through foreclosure and filed a chapter 7 and was discharge last agust 2010. I need to know if I can qualify to purchase a home through the VA home loan? At present I am staying with my son. Please respond. thank you for your assistance.

    • Joe Wallace

      Thanks very much for your question. VA loan rules require the borrower to wait at least 24 months before they are technically eligible for a VA loan after a foreclosure or bankruptcy. An individual lender may require longer wait times but for qualified borrowers some are willing to get started after the VA minimum wait time.

  2. SteveG

    Thanks for the interesting info on the MPR waiver. It causes me to wonder: could such a waiver ever be applied in the case of a condominium purchase contract, where the property unit was in good condition, but was deemed ineligible solely because the condo development itself was not on the VA's approved list because it had not previously been submitted?

  3. Noel Kifer

    My husband & I are under contract for a va loan for a home that has a barn in the back part of the land. About 2ft of the barn is crossing over as an encroachment onto the neighbors property. Will this be a problem closing with this encroachment? If so would there be a way to get around it?

    • Joe Wallace

      Has the VA appraiser already examined the property? If so, what was the outcome of the appraisal?

  4. OSCAR P. ESTIOKO

    Please remove my name. Thank you for your response to my question. I respectfully request to remove my name in the website. very respectfully, oscar p. estioko

  5. M Rountree

    I am wondering if the VA will give a MPR exemption when refinancing a mortgage to do repairs such as a roof when the rest of the building “is habitable from the standpoint of safety, structural soundness and sanitation”? Thank you, M. Rountree

    • Joe Wallace

      Are you applying for a VA IRRRL or cash-out refinancing?

  6. Musa

    Upon my VA appraisal in Texas, the appraiser found several cosmetic problems, worn siding, some bricks missing tuck points, front door weathered. Chipped paint, most of the flaws notated on the detached garage. In your opinion, could we qualify for a waiver? The appraiser on his initial inspection pictured the defects, we went and fixed all of those, then upon re inspection found more nitpicking blemishes. The house is 24 years old and in overall great condition. How would we go about getting a waiver? Thanks,

    • Joe Wallace

      Chipped paint can, depending on the age of the home, be considered a lead hazard and therefore not a cosmetic issue. It's difficult to say whether you would qualify for a waiver or not--state or local building code may apply in which case the VA waiver would not be possible--the home must meet state/local code to be approved. To discuss a waiver you should contact the VA directly by calling 1-800 827-1000.

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