If you are looking to buy a home with little to no money down, you may look at the USDA program. As long as you buy a home in a rural area and your household income doesn’t exceed 115% of your area’s median income, you may take advantage of this great government program.
Before you can buy just any home, though, you must find one that meets the Minimum Property Requirements. These guidelines are to help make sure the home is safe, sanitary, and structurally sound. While it might seem like just another hurdle to jump, it’s really to protect both yours and the USDA’s investment in the home.
The USDA Minimum Property Requirements
So just what are these mysterious Minimum Property Requirements? We take a look at them below.
- There must be street access to the home year-round. There must also not be any hazards affecting a person’s ability to get up the home on the sidewalk or driveway.
- There cannot be any cracks in the foundation. There also cannot be any moisture issues with the foundation.
- All walls both inside and outside the home must be in good condition. There should not be evidence of rotting, mold, or other structural issues.
- All exterior doors must have properly working locks.
- All interior doors must be properly in place and be working.
- All windows must be in good condition and be working. There should not be cracks, leaks, or mold on the windows.
- All flooring must be in decent condition without any visible hazards or issues.
- All garages, porches, and decks must be in good condition without any visible hazards.
- The roof must have a minimum of five years of life left and not have any visible leaks, holes, or missing shingles.
- All stairs must be in good working condition with no hazards. There must be a handrail and it must be properly affixed and usable.
- All electric and plumbing systems must be in good working condition with no visible issues.
- The sump pump must be in good working condition.
- There must not be evidence of any termite or other pest damage inside or outside of the home.
If the appraiser finds that the home doesn’t meet the MPRs, something must be done in order for financing to go through. The repairs must be done prior to the closing, which usually means the seller must agree to pay for and/or do the repairs. If the seller refuses, you have one of two options – you can walk away from the home or pay for the repairs yourself.
Typically it’s not recommended that you pay for the repairs unless they are less than $500. There is no guarantee that the financing will go through. If it doesn’t, you are then out the money you paid for the repairs on a home that you don’t own. If you can’t negotiate with the seller, it may be a sale that wasn’t meant to be, as there are many other homes on the market that you can use USDA financing on that may be in even better condition.
The USDA Minimum Property Requirements prevent you from investing in a home that might otherwise be a money pit. If the appraiser finds things wrong with the home, it gives you time to either get the items fixed or gives you a way out of the purchase without any financial consequences.