Veterans Affairs (VA) Appraisal & Minimum Property Requirements (MPRs): What to Expect

The Veterans Affairs (VA) home loan has helped numerous veterans and their families find their place to call home. If you’re an eligible veteran, active duty servicemember, or surviving spouse, it might help you do the same. However, before you can move into your dream home, it will need to pass a VA appraisal.  

VA appraisals are a mandatory step in the VA loan process, and they serve an important purpose. In this article, we will explain the VA appraisal requirements and the VA minimum property requirements (MPRs) the appraisers use to assess homes.

What Is a VA Appraisal?

A VA appraisal is a step required by the VA to move forward with the loan closing process. After a purchase agreement is signed by the buyer and seller, the lender will order the home appraisal to be done by an independent VA-approved appraiser.  

This appraiser will assess the property to determine if the sale price is reasonable and if the property meets the VA’s MPRs. The VA requires this step to ensure that the home you are purchasing is safe and livable.  

Part of that assessment will be based on an in-person examination of the home. Then, the appraiser will review relevant market data to determine whether the sale price is in line with similar home sales in that area.  

Sometimes, the appraisal will come in lower than the agreed upon price, or they will find MPR issues. We’ll discuss why that happens and what can be done about it later in this article.  

At the end of the VA appraisal process, the buyer will receive a notice of value (NOV), which outlines: 

• The estimated value of the home 

• Other sales of similar homes in the area 

• The home’s floorplan 

• Photographs of the home  
• Any items in need of repair to meet the MPRs

Who Pays for the VA Appraisal?

The veteran typically pays for the first VA appraisal. If the veteran requests a reconsideration of value (more on that later), they can pay for that, too. However, they can’t pay for reconsideration of value appraisals requested by the lender or seller. The veteran can’t pay for appraisals that are requested by anyone other than themselves, or the lender outside of a reconsideration of value appraisal.

VA Appraisal vs. Home Inspection

VA appraisals are often confused with home inspections. While they have some similarities, they serve different purposes. The home inspection is not a mandatory part of the VA loan process; however, it is typically recommended. Home inspectors are skilled professionals who will make a more in-depth assessment of the physical condition of the home. VA appraisers are looking only to assure the home meets the MPRs, but they may miss some other issues that a home inspector could catch.  

Home inspectors will take a thorough look at the foundation of the home, the roof and attic, the functionality of major appliances and systems (HVAC, plumbing, electrical), and other interior and exterior issues.  

As a buyer, this information can be crucial in determining whether you want to go through with the purchase or negotiate payment for the repairs with the seller. When done before the appraisal, it can give you a little more confidence that the home might pass that step.

The VA MPRs (Safety, Soundness, Sanitation)

As mentioned above, the VA-approved appraisers assess whether a home meets the minimum property requirements set by the VA. MPRs are in place to ensure homes purchased with VA loans are safe, structurally sound, and sanitary. They protect buyers, lenders, loan servicers, and the VA.  

A home can meet VA appraisal requirements with some defects, but nothing that compromises those three pillars. When an appraiser identifies an MPR issue, they will document recommended repairs to resolve it. They do not recommend repairs for cosmetic issues.  

The recommended repairs must be completed before the VA can guaranty the loan. The list of MPRs is long, but some examples of what they’ll look for include: 

• The livability of the space. The VA wants homes to have enough space for cooking, eating, sleeping, and other basic activities of daily life. 

• The state of mechanical systems. Not to be confused with the home inspection, the appraiser is simply trying to determine if things like electrical and plumbing are safe and reasonable usable.  

• Adequate heating. The VA requires permanent heating that can maintain a 50-degree Fahrenheit temperature in areas with plumbing. There may be leeway here for milder climates. Air conditioning, however, is not mandatory, but if it’s there, it must be operational.  

• Water supply. Water should be safe and readily available. The home should have a water heater and safe sewage disposal. 

• Property access. The home must be safely accessible from the street. 

Again, that list is not exhaustive, but it can give you an idea of the kinds of things the appraiser will look for.

Repairs Needed to Meet MPRs

If the VA appraiser determines that repairs are needed to meet the MPRs, there are a few options available to buyers. First, talk to your seller about completing the repairs. They are not required to pay for repairs, but if they really want the sale to go through, they might consider it.  

Should the seller refuse to pay for the repairs, the VA does allow the buyer to pay for them. However, not every lender will allow that, so be sure to speak with your lender about their policies on repairs.  

Finally, VA buyers can walk away from the purchase using your VA “escape clause.” Though it may be disappointing to leave that home behind, using the escape clause could ultimately be worth it to avoid serious, expensive repairs.

Waiver of MPR Repairs

Veterans can request a waiver of MPR repairs after receiving their NOV. The VA will consider the waiver if: 

• The request is signed by the veteran 

• The lender agrees with the veteran’s request 

• The property is habitable, safe, structurally sound, and sanitary 

An inspection report from a licensed professional, though not required, can ensure you are fully informed about the condition of the item in question. If the waiver request is approved, the VA will remove the repair requirements. However, they may also reduce the value of the home by the contributory value of the item being waived.

What if the VA Appraisal Comes in Low?

Beyond MPR issues, VA appraisals can also return lower than the agreed upon sale price, which can delay or derail the loan. When this happens, you have some options that could potentially help you move forward with the sale.  

Tidewater & Reconsideration of Value (ROV)

The VA gives you two days after receiving the NOV to request a Reconsideration of Value (ROV) under their Tidewater Procedure. This procedure lets the requester submit additional home sales data for that area to support the originally agreed upon sale price. For each comparable sale submitted, you must include:  

• The street address of the home 

• The sale price 

• The data of the sale 

• Gross living area (meaning the total, finished, above-grade residential space inside the home’s exterior walls) 

• A copy of the listing if the property was listed 

• Any other data that could support the claim that this property and its sale are comparable to the home you are buying.

Renegotiate the Sale Price 

Sometimes the seller will be open to renegotiating the sale price to an equal or lesser value than the appraisal. However, they are not required to do this if they don’t mind finding another buyer, or if other solutions are able to resolve the issue. 

Pay the Difference in Cash

The VA may let buyers make up the difference between the NOV and the agreed upon sale price with cash at closing. However, it’s important that you carefully consider whether it’s worth paying more for a home than its value. That is ultimately a personal decision, but one that must be taken seriously.

Final Thoughts

The VA appraisal requirements exist to protect the interests of buyers, lenders, and the VA. The agency wants veterans and their families to move into homes that are safe, sound, and sanitary at a fair and reasonable price.  

If you are preparing to use your VA home loan to buy a home, it may help to work with a real estate agent experienced in the VA loan process. They may be able to help you avoid properties likely to experience appraisal issues. For further guidance, it may also be wise to work with a lender with VA loan experience.