What are Minimum Property Standards (MPS)?
In a nut shell these are typically health and safety issues. These are considered minimum property standards for anyone living in a home in the USA.
These can be simple things like broken windows, obvious trip hazards, holes in the floor, and more complex things like obvious dry rot, rodent damage, support posts that are failing, and foundation issues.
If you can see dry rot then order a termite or "structural pest report" as the appraiser is obligated to call for one if they see it for a 203b or a 203k loan. The way around this if it is a 203k loan is to have the consultant call for those items to be corrected... this way the appraiser sees it fixed rather than damage.
Why are they important to you as a Realtor?
Simply because your appraiser will use them, your 203k consultant will use them, and you should know them so you have a smoother closing.
Knowing these thing in advance can keep your closing on track. Ignore them and find yourself having to get a termite report, that could be death on a good many sales. If one is called for you must now deal with all of the issues in that report.
What happens if we have a streamlined k loan and the appraiser calls for a termite report?
Then your loan likely has just become a full or Standard 203k loan. Look at the time you wasted and now your payday maybe pushed back or eliminated all together with this new stipulation. Once the termite report is brought into the equation you must cure it's findings.
What can you do to help prevent these last minute surprises?
Make all of your renovation loans Standard 203k loans and stay away from the streamlined k which accounts for 98% of the problem 203k loans in the USA. Welcome to our newest affiliate in Brandan MS, Charlie Sessums, home inspector and FHA 203k consultant.