VA appraisals

VA Minimum Property Requirements For Homes To Be Purchased With VA Loans

December 11, 2013

VA Minimum Property Requirements For Homes To Be Purchased With VA Loans

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VA loan rules for appraisals include something known as VA Minimum Property Requirements or MPRs. These MPRs are only part of the rules that apply to a home to be purchased with VA mortgage loans–state and local building codes must also be observed. But the VA minimum property requirements, spelled out in VA Pamphlet 26-7, do address a variety of issues from the marketability of the home to how its can be used in a non-residential fashion.

According to VA Pamphlet 26-7 Chapter 12, these MPRs begin with the following requirement; “The property must be a single, readily marketable real estate entity.”

When it comes to those non-residential uses of the home, Chapter 12 states, “Any nonresidential use of the property must be subordinate to its residential use and character. If any portion of a property is designed or used for nonresidential purposes, that property is eligible only if the nonresidential use does not:

  • Impair the residential character of the property, or
  • Exceed 25 percent of the total floor area.”

VA loan rules add that when the lender makes this calculation, “the total nonresidential area must include storage areas or similar spaces that are integral parts of the nonresidential portion.”

VA MPRs do not address every single aspect of the home or every system contained within, but it does make a few very important requirements known for specific appliances, systems, etc. For example, there’s a heading in Chapter 12 titled, “Heating” which instructs the lender and appraiser, “Heating must be adequate for healthful and comfortable living conditions. If the property has an unvented space heater, see the requirements in Section 11.12.”

When it comes to wood burning stoves used as a “primary heating source” Chapter 12 says the home “must also have a permanently installed conventional heating system that maintains a temperature of at least 50 degrees Fahrenheit in areas with plumbing.”

There are even VA MPRs for solar heating systems. “Solar systems for domestic water heating and/or space heating must:

  • Meet standards in HUD Handbook 4930.2, Solar Heating and Domestic Hot Water Heating Systems
  • 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.”

As you can see, many of these rules protect both the borrower’s current investment in the home, but also the future of the value of the property. You never know when it may be time to sell the property, and VA loan rules require the home to be economically viable for the lifetime of the mortgage.

Do you have questions about VA home loans? Ask us in the comments section. 

2 Comments
  1. Michael F. Ferraro

    I purchased a condo in a 28 unit CID and closed on Jan 17, 2014. The appraisal revealed that there were 11 tenant occupied units or 39%. After receiving a membership list on March 3, 2014, it revealed that there are 17 rentals or 61% ratio. Investigation reveals that they have been tenant occupied for many years. The project was incorporated in 1984. VA requires no more than 50%. Violations to the Davis-Sterling Act abound and the deferred maintenance is unmentionable. I have notified the direct lender of the situation but have not received a response. I am of the opinion that the Management Company may have delivered the inaccurate information to the appraiser by design. If I had known the tenant to owner occupancy was so high I would have declined to proceed with the sale and of course the lender would have had to reject the property. What, if any, at this place in time, are my options? If I do not hear from the direct lender, who else can I appeal to? Thanks Michael Ferraro

    • Joe Wallace

      Contact the Department Of Veterans Affairs directly for assistance by calling 1-800 827 1000.

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