Deciphering the VA Lender’s Handbook Chapter 12 Part 5
The last couple of articles covered the basic Minimum Property Requirements (MPRs) that the VA has established for all properties financed with a VA loan. In this article, we’re going to start getting into more case-specific MPRs that may not come up at all. We’re going to start by covering the MPRs in relations to shared facilities and utilities, then we’ll jump onto access-related issues.
The VA MPRs allow for shared facilities such as laundry, storage space, or heating “…in two-to-four living unit buildings under a single mortgage.” Other scenarios in which facilities might be shared shouldn’t come up due to the nature of the VA loan program; the loan can only be used to purchase a home to be the borrower’s primary residence, and not for renting a property. Utility services, on the other hand, must be independent for each unit, with only two exceptions, as follows:
- living units under a single mortgage or ownership may share water, sewer, gas, or electricity as long as there are separate service shut-offs for each unit, and
- living units under separate ownership may share connections from the main to the building line when those connections are protected by
- easement or covenant, and
- a maintenance agreement acceptable to VA.
Also, the VA stipulates that the utility lines serving one living unit cannot pass over, under, or through another living unit unless there is a permanent legal arrangement that will allow the borrower to make repairs and perform maintenance on the lines without being considered trespassing on the adjoining properties. As you can see, the VA does its best to reasonable and flexible with the MPRs. The most important thing is that the livability of the property for the veteran is not negatively affected.
Now we’re onto access-related issues with the property. The VA wants to make sure that the veteran has all the normal, expected access to the property. The first requirement is that the property must have safe and adequate pedestrian or vehicular access from a public or private street. If it is a private street, it must be protected by a permanent easement, and maintained by either a homeowners association or joint maintenance agreement. Whether it is private or public, the street must have an all-weather surface. Additionally, the VA requires that the borrower be able to access their living unit without having to pass through the property of any other living unit. The VA also requires that each unit must be able to be completely used and maintained on its own without trespassing onto adjoining properties. The Handbook also states that “Any easements required must run with the land.”
Continuing with the theme of not having to cross anyone else’s property, the VA requires that the backyard be accessible without having to pass through any other living unit. Now, this doesn’t mean that you have to have a back-door and patio leading out onto your perfectly manicured back lawn; the access can be by means of an alley, easement, passage through a common area (like in a condo building) or by any other acceptable means. The means of passage are generally acceptable as long as they don’t go through another living unit. The last requirement the VA has on this topic is that there is sufficient access for the borrower to be able to maintain the exterior walls of their living unit as needed.
The next article will be covering the VA’s MPRs in regards to hazards and defective conditions. If you are wanting to learn about all of the VA’s MPRs, we encourage you to read all of the articles of this series, or you are welcome to peruse Chapter 12 of VA Lender’s Handbook on your own, which you can find here.