VA and the Minimum Property Requirements
An appraisal is needed to support the value of a property when a VA loan is being applied for. And because VA loans typically don’t require an appraisal when refinancing from one VA loan to another, the appraisal used to justify the sales price of the subject property has three important features. Comps, condition and Minimum Property Requirements, or MPR. VA loans can be used to finance a newly built or existing home, a condominium, a manufactured and a modular home and all must comply with these three basic guidelines.
Comps, or comparable sales, are lists of similar homes in the area that have closed within the previous 12 months. If the subject property is selling for $200,000, the appraiser looks for similarly priced homes in the area to justify the $200,000 sales price.
The condition of the home is also noted and the VA asks that the appraiser note the condition of the home. Average to good condition typically means no problems but anything less than average condition will likely cause the loan approval come to a halt.
MPRs are also noted in a VA appraisal and are unique to VA mortgages. The appraiser reviews and inspects the following:
- Electrical and plumbing in good condition with an extended life
- Roof in good condition
- Heating and air conditioning that keeps the property at least 50 degrees in the winter
- Lead based paint remediated
- Termite, mold and dry rot absent
- Water tested to comply with local standards
- Adequate living and sleeping quarters
The VA appraisal will take a bit longer to be performed but not much longer. Don’t expect the VA appraisal to take two weeks longer than any other appraisal type and in fact, VA appraisals can be delivered in the same time as conventional appraisals.