Greetings,

On December 11, 2023, the U.S. Department of Veterans Affairs (VA) will issue an Advance Notice of Proposed Rulemaking (ANPRM) seeking public input on potential changes to the Minimum Property Requirements (MPRs) for VA-guaranteed, insured and direct loans. The ANPRM aims to gather feedback on areas for improvement in the VA's MPRs, including the possibility of aligning them with industry-wide property standards. Comments on this rulemaking should be submitted through https://www.regulations.gov/. 

Summary of the rule: This ANPRM solicits information relating to VA’s MPRs for guaranteed, insured and direct loans. VA will consider the information received in response in implementing the Improving Access to the VA Home Loan Benefit Act of 2022 (the Act). In relevant part, the Act requires VA to consider making changes to MPRs in prescribing updated regulations or program requirements regarding appraisals. This ANPRM seeks public input to better understand areas for improvement in VA’s MPRs, including whether VA should consider adopting an approach that aligns with other industry-wide property standards already in existence.

What does the regulation do? This ANPRM requests public comment to better understand areas for improvement related to the appraisal process in the VA home loan program. Specifically, VA is requesting public comment on VA’s existing MPRs, areas for improvement, and whether VA should consider adopting an approach that aligns with other industry-wide property standards already in existence.

Are the provisions, services, or benefits associated with this rulemaking current practice or new to Veterans? No. Congress requires that VA ensure the suitability of any property financed through a loan guaranteed or made by VA. VA implemented this requirement in the form of VA MPRs. VA maintains a list of MPRs in Chapter 12 of VA Pamphlet 26-7, also commonly referred to as the Lenders Handbook.

Who does it impact? While VA is currently only requesting public comment and has yet to propose any regulatory changes, changes to VA’s appraisal program, and MPRs specifically, will affect Veterans using their Chapter 37 home loan benefits, lenders, appraisers, holders, secondary market investors, and servicers. Additionally, VA must consider the effect on the Government/taxpayer as the appraisal forms the basis of the notice of value (NOV), or VA’s determination as to the reasonable value of the property securing the loan.

Why is it happening/important? On December 27, 2022, the President signed the above-referenced Act into law – the Improving Access to the VA Home Loan Benefit Act of 2022, Pub. L. 117-308, 136 Stat. 4393. Section 3 of the Act, in part, directs the Secretary to consider making changes applicable to MPRs. Therefore, VA is issuing this ANPRM to request public comment as the agency considers regulatory amendments pertaining to MPRs.

Sincerely,

Loan Guaranty Service