Missing Kitchen Fixtures and the VA Appraisal

A reader asks, “We have found a really nice HUD home in great condition, but all kitchen appliances are gone. They even took kitchen sink, most light fixtures have been removed. Other than that, the house is great.”

“I understand that HUD doesn’t allow repairs prior to closing so I am trying to find out what I really need to pass VA inspection. Do realtors ever let you hook up stove, dishwasher, and sink so you can pass the VA inspection since you are pre-approved for loan and have won the HUD bid?”

The reader’s question is affected by several factors–not just VA minimum property requirements. While the VA MPRs don’t specifically address every single possible problem with a home (missing fixtures, in this case), the home must be assigned a fair market value and such conditions could affect that value.

But there’s a bigger issue to think about–in cases where VA MPRs don’t specifically address a problem such as this, there are local building codes and ordinances which may. These codes and ordinances vary from housing market to housing market. There’s no standard nationwide, so it’s impossible to tell what might pass in one location but fail in another.

The reader’s problem may be that local building code requires these missing fixtures for the home to be considered compliant, but in the case of a HUD home or REO property those requirements may be relaxed somewhat depending on the nature of the problems and other factors. It all depends on individual circumstance; the Department of Veterans Affairs guidelines are designed to offer flexibility for many issues. Each one is handled on a case-by-case basis.

For example, Chapter 12 of the VA Lender’s Handbook states, ” VA may agree to modify the MPRs where justified by certain conditions common to a particular geographic area or occurring on the site, or where such conditions make compliance impractical or impossible…An MPR for existing construction  can be waived by the VA field office if

• a veteran is under contract to purchase the property
• the veteran and lender request the exemption in writing
• the property is habitable from the standpoint of safety, structural soundness and sanitation, and
• VA is satisfied that the nonconformity has been fully taken into account by way of depreciation in the VA valuation. ”

For specific help with a situation like the one the reader describes, contact the VA directly at 1-800-827-1000.

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