The VA has what are called “Minimum Property Requirements” (MPRs) for many aspects of a home. These MPRs exist to ensure that a veteran does not purchase a home using their VA loan benefits that is not going to meet their needs. Minimum Property Requirements cover everything from water and plumbing systems to the foundation of the home, from termite damage to the possibility of flooding, and from safety standards to electrical systems. While there are exceptions to the VA MPRs, they are few and far between, and are usually specific to a location with extraneous circumstances that make it difficult or impossible for the home to meet the requirements.
It’s normal for these MPRs to raise a lot of questions for those hoping to buy a home with a VA loan. Understanding the MPRs before even beginning the house hunt is the best way to save both time and money, and prevent disappointment. No one wants to find the home of their dreams at a price range they can afford only to find out that it doesn’t meet the VA Minimum Property Requirements. The rules vary a bit area to area, but are relatively standard for most of the requirements. The home is evaluated to make sure it complies with the VA MPRs during the official VA appraisal that must take place before the loan is closed. The appraiser goes through the home and appraises the fair value of the home, which is the amount that the VA will guarantee the home for (and not a penny more, I might add), and also evaluates whether the home meets the minimum requirements. Appraisers generally don’t budge on these things, making it even more important to know what they’ll be looking for before they come.
Potential borrowers looking at an older home may face particular questions concerning the electrical system in the house. What does the VA require of electrical systems in a home, and what, if any, concessions do they make in the case of an older home that has an old electrical system? Does the house have to have a breaker system or can it have an older fuse box instead? Are there requirements for how many outlets each room must have or where the outlets must be located? These are great questions to ask and even better ones to answer. The sort-of nice thing is that the VA is pretty vague on this question. The VA has made no specific standard regarding the way the electrical system is set up – except in regards to safety. If there are exposed wires (especially live ones) in the home, that is certainly something the appraiser will take note of, but as far as whether the system is more modern or more old-fashioned, the VA itself makes no standard.
That’s not to say, however, that there are no standards on electrical systems for your home. Even though there is no blanket statement by the VA that dictates what types of electrical systems are approved and what ones are not, there are still requirements for those systems. The most efficient way for the VA to establish MPRs for electrical systems is to defer to the local authorities. Every area has building codes and regulatory agencies that have requirements and standards for electrical systems in houses. In order for an electrical system to be acceptable, it has to comply with all of the local building codes and regulations. The VA requirement essentially states that the authority on the matter is the local regulatory agency.
But for those specifically asking about the fuse box vs. the modern breaker system, the VA has a line just for you: “If a fused electrical system is acceptable to the local authority it is acceptable to VA.” The best way to know what types of electrical systems will be approved is to look up the local building codes and find out what the local regulations are for your area. You can also contact a VA-approved lender in your area to find out more details on all of the VA minimum property requirements and have many of your questions answered directly. A VA-approved lender will be very familiar with the appraisal process and should know about specifics for your area.