Feb

Minimum Property Requirements for a USDA Home Loan

: flickr photo by Josh Hill

Any home that will utilize a USDA Home Loan must meet minimum property requirements (MPR), these are the same requirements utilized by FHA. The MPR is referred to as the 3s’s, Safety, Security, and Soundness. The requirements differentiate between minor and major. A minor item is not something that would keep the house from meeting the requirements. Some examples of minor items: a hole in a window screen, cracked glass, worn floors, or a minor plumbing leak. Some major items: foundation damage, worn out roof (3 or more layers of shingles), faulty mechanical system.

When you are looking at a homes keep these items in mind, so you’ll know if the property will meet USDA minimum property requirements.

This list is for reference only and does not guarantee compliance with FHA Minimum Property Requirements. Minimum Property Requirements are to insure the health and safety of the occupants and/or the marketability of the property.

The basic requirement is that the property be free of all known hazards and adverse conditions that:

may affect the health and safety of the occupants
may affect the structural soundness of the house
may impair the use and enjoyment of the house

FHA Existing Property Condition Screening Checklist

Site Hazards And Nuisances
Presence of the following may indicate unacceptable property condition:

Sinkholes
Active or planned gas-drilling within 300 feet
Within 75 feet of operating oil/gas well with no visible mitigation measures
Abandoned oil or gas well within 10 feet
Slush pits
Excessive noise or hazard from heavy traffic area
Dwelling or improvements within 10 feet of easement for high-pressure gas or petroleum line
Dwelling or improvements within fall distance for overhead towers (high-voltage, radio/TV, cell phone etc)
Excessive smoke, fumes, offensive noises, or odors
Stationary storage tanks with more than 1000 gallons of flammable or explosive material

Wood Destroying Insects
Presence of the following will require a termite inspection and treatment if infestation is present:

Structure is ground level and wood is touching ground
House or other structure show obvious evidence of infestation
Local jurisdiction requires inspection
Inspection is customary to the area

Soil Contamination
Presence of the following may indicate unacceptable property condition:

Surface evidence of underground storage tank
Proximity to dumps, landfills, industrial sites that could contain hazardous materials
Presence of pools of liquid, pits, ponds, lagoons, stained soils or pavement

Grading And Drainage
Presence of the following may indicate unacceptable property condition:

Grading does not provide drainage away from structure
Standing water near structure

Individual Water And Sewage Systems
Presence of the following may indicate unacceptable property condition:

Private sewage system shows evidence of system failure
Property lacks connection to public water (you’ll need to get a water test to ensure water quality meets public health requirements)
Separation between well and septic drain field less than 100 ft (75 feet may be acceptable if local authorities allow.)
Separation between well and property line is less than 10 feet (If local authority requires greater distance that requirement must be met.)

Private Road Access
Presence of the following may indicate unacceptable property condition:

Property inaccessible by foot or vehicle
Property accessible only by private road without permanent recorded easement

Floor Support Systems
Presence of the following may indicate unacceptable property condition:

Significant cracks
Evidence of water damage
Evidence of spongy/weak/rotted flooring

Framing/Walls/Ceiling
Presence of the following may indicate unacceptable property condition:

Significant cracks
Visible holes in exposed areas that could affect structure
Damaged plaster, sheetrock, or ceiling materials in homes constructed before 1978
Significant water damage

Attic
Presence of the following may indicate unacceptable property condition:

Inadequate access
Evidence of holes
Support structure damaged
Significant water damage visible from interior
No ventilation by vent fan or window

Basement
Presence of the following may indicate unacceptable property condition:

Blocked or inadequate access
Evidence of significant water damage
Significant cracks or erosion in exposed areas that affect structural soundness

Crawl Space
Presence of the following may indicate unacceptable property condition:

Blocked or inadequate access
Space inadequate for maintenance (recommended 18 inches)
Support beams not intact
Excessive dampness or ponding of water

Slab
Presence of the following may indicate unacceptable property condition:

Significant cracks that could affect structural soundness

Roof
Presence of the following will require a roof inspection and possible repair:

Missing tiles, shingles, flashing etc
Holes
Signs of leakage

Furnace/Heating System
Presence of the following may indicate unacceptable property condition:

Unit does not turn on
Heat is not emitted
Unusual noise
Smoke or irregular smell
Significant holes or deterioration in unit

Central Air Conditioning
Presence of the following may indicate unacceptable property condition:

Unit does not turn on
Cool air is not emitted
Unusual noise
Smoke or irregular smell
Significant holes or deterioration in unit

Electrical System
Presence of the following may indicate unacceptable property condition:

Electrical switches don’t work
Outlets don’t work
Presence of smoke or sparks from outlet
Exposed frayed or unconnected wiring

Plumbing System
Presence of the following may indicate unacceptable property condition:

Significant drop or limitation in water pressure
No hot water
Toilets don’t function or have been removed
Toilet leaks
Sinks/bathtub/shower leaks (very minor leaks may be acceptable)
Sinks/bathtub/shower does not work or have been removed
Swimming pools not operational, in bad repair or not maintained

Paint
Presence of the following may indicate unacceptable property condition:

Chipped peeled or peeling paint on interior or exterior of home and/or structures and improvements if home built before 1978
Chipped or peeling paint on exterior surfaces if finish is unprotected (ie, bare woods) if home built after 1978

Other
Presence of the following may indicate unacceptable property condition: