The Department of Veterans Affairs established Minimum Property Requirements (MPRs) to ensure that our service members were buying homes that were safe, structurally sound, sanitary and up to code. Buyers often complain when a MPR is pointed out during an appraisal, but if complaints happens to you, know that these safeguards are really there for your benefit, and for the benefit of your home.
Here’s an outline of five of the most frequent MPR issues to help you better plan your purchase and know what questions to ask before making an offer.
1. Access to the Home
If you’re going to purchase a home, you want to make sure that you can get to it, right? Some properties have access via public roads and others have access by way of private ones. If you want to purchase a property that only has access by way of a private road, you will need it to meet the following requirements:
- All-weather surface. The road will need to be covered with gravel, pavement, asphalt or another all-weather surface.
- Permanent easement. You will want to make sure that there is a permanent easement protecting the property. The VA wants to ensure that your proposed new home doesn’t end up being landlocked, and your only way of access involves trespassing on a neighbor’s land.
- Maintenance agreement. By far, the most common issue when dealing with private roads is the road maintenance agreement. If there is a homeowner’s association, this is generally covered in the covenants or bylaws. But in rural areas, a road maintenance agreement can be difficult to acquire if it isn’t already tied to the property. Generally, the VA wants a recorded agreement signed by all homeowners on the private road. This can be a daunting task for some home buyers who may end up having to go door-to-door requesting signatures. Additionally, some states require that an attorney draft the agreement, which is an additional cost in the transaction that you will want to consider before making an offer.
2. Lead-Based Paint
Many real estate contracts include disclosures on lead-based paint. If you were looking to purchase a home built prior to 1978, you’ll find this disclosure. (If you’re unsure about this, talk to your real estate agent and discuss whether lead paint is a risk you are comfortable taking.)
Once under contract, an appraisal will be ordered, and the appraiser will be required to make special note of any areas where paint may be peeling, flaking or in an otherwise defective condition. If any areas are noted on the appraisal, those areas will have to be repaired prior to closing.
On subsequent inspections, appraisers want to see the paint removed from the surface and that it was washed and repainted with two coats of non-leaded paint. The seller must pay for these repairs and provide invoices to confirm the buyer didn’t.
3. Wood-Destroying Insect Inspection Report
Try saying that three times fast! In most states a wood-destroying insect inspection report, commonly known as a “pest inspection,” is required for most mortgage transactions. It’s another one of those fees called “VA non-allowables,” meaning it’s something the homebuyer can’t pay in most states.
This is typically a cost the seller or real estate agent will incur. Although, the VA recently updated their state deviations, allowing buyers in some states to pay for their own inspection. These states currently include Alabama, Arkansas, Arizona, California, Florida, Louisiana, Mississippi, Oklahoma and Texas. Now, just because the buyer can pay the cost doesn’t mean they can’t still negotiate for the seller to pay for this fee.
Another way the buyer could pay for the pest inspection is if the borrower orders a home inspection and the inspector completes a pest inspection at the same time at no additional charge. If this is the case then the buyer can submit an invoice from the inspector detailing this information and this will generally be permitted as an exception. There are a few states in the North where this is discretionary, so be sure to check with your VA loan specialist before ordering a pest inspection.
Most pest inspections are completed using a National Pest Management Association form titled the NPMA-33. The NPMA-33 is a two-page document outlining whether there is visible evidence of wood-destroying insects. Keep in mind that wood-destroying insects are not just limited to termites, but can also include carpenter bees. Dry rot is also a common item that will be noted on a pest inspection. If you receive a clean pest inspection, no further action will need to be taken. If there is evidence of wood-destroying insects or dry rot, the seller will have to pay for treatment or repair of the areas (at no cost to the buyer) prior to closing.
4. Heating Issues
If you’re looking to purchase a home with any type of heating system other than the standard electric or gas, talk with your loan officer before making an offer on the home. There are a few things to note for properties with unconventional heating systems:
- Homes with an unvented fireplace or space heaters: This will only be acceptable if you can provide a letter from a heating and air company or other similar professional stating that they have inspected the unit, it was installed properly, is in working order and is operating up to code. The VA will also need a written acknowledgement from you stating that you are aware that the home contains this type of heating system and you acknowledge that it has not been inspected by the VA.
- Homes with wood-burning stoves: If this is the primary heating source in the home, there must also be a permanent heating system in working order that will maintain a temperature of 50 degrees in any areas of the home with plumbing. There’s no one around to keep the stove burning if you go on vacation for a week in the dead of winter.
Some areas of the country have such a mild climate that the VA doesn’t require a heating system.
5. Safe Water and Sanitation
Think about how much water you use on a daily basis. From cooking to laundry, it really adds up. The VA wants to be sure the water you’re using is safe.
If the home uses public water and sewer hookups, you generally won’t need to provide additional documentation or testing, since the public works department in that area generally monitors these systems. But if you’re looking to purchase a home with a private well, you will be required to get a well test.
A well test must be conducted to determine if the water quality meets the requirements of the local health authority or the Environmental Protection Agency (EPA) if there is no local health authority in your area. Be aware, the water sample must be collected from an inside source like the kitchen sink. It can’t be collected from an outside faucet or spigot. The homebuyer can collect the sample and deliver the water to the testing facility for testing.
In addition to safe drinking water, the VA wants to ensure the home meets certain sanitation requirements. Mainly the home must have sanitary facilities; a home without a working bathroom will not pass the MPRs. There has to be a safe method of sewage disposal.
Be sure to lean on your real estate agent and VA loan specialist to help you identify the best way to address any MPR issues as they arise. While these requirements can be frustrating at times, they really are in place for your benefit.