VA appraisers assess both market value and property condition under the VA Minimum Property Requirements defined in the VA Lender Handbook (Pamphlet 26-7). Properties that do not meet MPR cannot be financed with a VA loan until deficiencies are corrected. Understanding common MPR failures helps MLOs set expectations before the appraisal is ordered.
Most Common MPR Failures
- ✦Peeling or chipping paint on properties built before 1978: lead paint hazard; all affected surfaces must be stabilized before closing
- ✦Roof with fewer than two years of estimated remaining economic life (per appraiser's assessment)
- ✦Active water intrusion, evidence of mold, or signs of prior flooding not remediated
- ✦Foundation issues: active settlement, significant cracks, or structural compromise
- ✦Exposed or inadequate electrical wiring; service panels that pose a safety hazard
- ✦Missing handrails on staircases with three or more steps
- ✦Heating system unable to maintain 50 degrees Fahrenheit in all habitable rooms
- ✦Water heater lacking a pressure or temperature relief valve
How MPR Conditions Are Resolved
The VA appraiser lists MPR items as conditions that must be satisfied before the loan can close. The seller typically cures these items; the veteran is not required to pay for MPR repairs (though they may negotiate to do so in a soft market). After repairs are complete, a repair inspection (sometimes called a compliance inspection) is ordered through the same appraiser or another VA-approved appraiser, at the borrower's cost.
Escrow Holdbacks for MPR Items
VA allows lenders to use an escrow holdback for minor MPR repairs under their Lender Appraisal Processing Program (LAPP) authority. Not all lenders exercise this option; confirm with your lender before presenting it as a solution. The repair must be minor, non-structural, and with a concrete completion timeline. If the lender does not offer escrow holdbacks, repairs must be completed and verified before closing.
VA Appraisal vs Home Inspection
The VA appraisal is not a home inspection. It covers safety and habitability, not every mechanical or cosmetic issue. Veterans should always order an independent home inspection in addition to the VA appraisal. A home inspection can reveal issues the appraiser did not flag, protecting the veteran from costly surprises after closing.
Aria can identify typical MPR failure patterns by property type and age, and outline how to document repair escrow holdbacks for lender review. Ask at vicariointel.com.
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