05 May The Complete Guide To Buying An Old House With A VA Loan
It’s a common misconception that you can not purchase an old home with VA loans. However, as long as you are using the house for primary residence and the property passes certain MPRs, you can qualify with any home you want.
What are MPRs?
Minimum Property Requirements (MPRs) are certain conditions your house must meet to qualify for a VA appraisal and, therefore, VA loans. These requirements ensure that the house is safe for living and does not pose any health hazards. During the appraisal, which is a mandatory step of qualifying for a VA loan, the VA appraiser evaluates the actual worth of the house and ensures that it passes ALL the MPRs.
So, if you are planning to purchase an old, historic property with your VA mortgage benefit, here are some things you would need to keep in mind.
Understanding VA Appraisals
After you go on a house hunt and select the property of your dreams, you must ask your lender to apply for the VA appraisal. A VA appraisal appraises the actual amount of the house selected. The appraiser will compare the house with at least three like properties and determine the actual worth of the home. The lender will then provide the appraised amount as the loan amount.
However, that’s not it. An appraisal comes with a two-fold purpose. In addition to evaluating the actual worth, the appraiser will inspect the property and ensure it meets all the MPRs. If an old home that you selected is able to meet the MPRs, you can qualify for the loan. But, there may be cases when the appraiser either asks you to get some repairs done or look for another property. If you are ordered with some repairs, you would need to get it done or ask the seller to get them done in order to meet the MPRs. And, if you are ordered to look for another property, you would have to walk away from the purchase and look for another old home.
Another thing you must note is that VA appraisals are NOT home inspections., The appraiser will simply ensure that the house is safe for living. They will not inspect and advise you to get repairs done to make the living worth it.
Meeting The MPRs
Here’s the list of all the MPRs the property must meet to qualify for the VA loan-
- The house must be accessible on a private or public road at all times.
- Unless you have a legal lease, the house’s backyard must not be inhabited by another unit or someone else.
- The home must not be located in a Runway Protection Zone or Clear Zone unless you are ready to sign an acknowledgment.
- The attic must have proper ventilation.
- The property must have at least 75% of residential space.
- There must be separate places for eating, bathing and bathroom.
- The house must not have more than four units sharing areas like laundry or storage.
- There must be a proper maintenance agreement in case of a water well.
- All the mechanical systems, including heating, must be safe and sized appropriately.
- There must be an adequate sewage system.
- The house must have a separate place for gas, power and sewer.
- The water supply is clean and continuous.
- There must be no leaks on the roof.
- Infestations like termites, molds, decay, and fungus are a strict no.
- The sharing spaces/areas must be detached from the house properly without any gaps.
- The property must have a proper drainage system and enough groundwater.
- The paint must not be peeling off.
- The home must not have any hazardous material like acid etc.
The Bottom Line
While this might seem a lot, if the property does not meet the MPRs, you can always get the repairs done. The VA can ask you to get some things done and then apply again for the appraisal in order to qualify.