St. Louis + Memphis · $175K ceiling · target August 2027 · built Aug 19, 2026
VA rules that kill deals — screen on these first
The self-sufficiency test (3–4 units only)
For a 3 or 4 unit VA purchase, the property must be self-sufficient:
75% of total gross rents ≥ full PITI payment
Fail this and the loan dies, regardless of your income or credit.
Your actual screening numbers
At the $175K ceiling, 5.875%, funding fee $0 — waived, 20% service-connected. Insurance estimated at $200/mo. Taxes computed from official published rates.
| St. Louis City | Memphis |
|---|
| Assessment ratio | 19% of market | 25% of market |
| Rate per $100 assessed | $7.9593 | $5.2708 (city + county) |
| Tax / month | $221 | $192 |
| Effective tax rate | 1.51% | 1.32% |
| Loan amount | $175,000 | $175,000 |
| P&I | $1,035 | $1,035 |
| PITI | $1,456 | $1,427 |
| Gross rents needed | $1,941/mo | $1,903/mo |
| Per unit — 3 units | $647 | $634 |
| Per unit — 4 units | $485 | $476 |
Funding fee waived. A service-connected rating of 10% or higher exempts you entirely — 20% exempts exactly as completely as 100%. That is $3,762 not borrowed, $22/mo lower payment, about $8,000 over the life of the loan, and roughly $3,100 more purchase price at the same monthly cost. Make sure your Certificate of Eligibility reflects the exemption; if a lender quotes you a funding fee, that is an error to correct, and a fee paid in error is refundable.
The test is not your binding constraint. You need roughly $490/unit on a fourplex or $650/unit on a triplex. Both markets clear that comfortably. Which means condition — not math — is what will kill your deals. Screen MPRs first, run the rents second.
Correction to earlier guidance. I previously said St. Louis had the lower property tax. It does not. On a market-value basis St. Louis City is 1.51% and Memphis is 1.32% — Missouri's lower 19% assessment ratio is more than offset by its much higher rate. The case for St. Louis rests on your Missouri MLO license, not on taxes.
A 2-unit is exempt from this test. That makes duplexes materially easier to close — and it's why a duplex may beat a fourplex even at worse headline numbers.
Cheap markets pass this test easily. A $150K fourplex in Memphis or north STL renting four units clears it comfortably. The same test is nearly impossible in Los Angeles. This rule is the reason the Midwest is where your VA benefit actually works.
Minimum Property Requirements
VA appraisers enforce MPRs, and cheap multifamily fails them constantly. Screen listing photos for:
- Peeling or chipping paint on anything pre-1978 — lead hazard, automatic fail
- Roof with no remaining life
- Missing or non-functional HVAC in any unit
- Active leaks, standing water, foundation cracks
- Broken windows, missing handrails, unsafe steps
- Any unit not separately habitable
Skip the gutted ones. VA is not a rehab loan. If a unit is stripped to studs or missing a kitchen, it will not appraise MPR-clean. Those are cash deals, not VA deals — which is a fine use for the other purchase, just not this one.
Occupancy
You must occupy one unit, generally within 60 days of closing. This is a primary residence purchase. It only works if you are actually moving.
Market snapshot
| St. Louis | Memphis |
|---|
| Your MLO license | Yes (MO) | No |
| Effective property tax | 1.51% | 1.32% |
| 3BR FMR | $1,100–1,400 | $1,300–1,500 |
| Median list YoY | −4 to −5% | −14% |
| Days on market | ~43 | ~64–66 |
Memphis rents higher, negotiates softer, and taxes lower. St. Louis is the only one of the two where your license turns neighbors into origination clients — that, not taxes, is the case for it. Watch both; the deal decides.
Jermaine Fields · personal acquisition research, not marketing material · VA self-sufficiency and MPR rules per VA lender guidelines — confirm current requirements with the lender at application · tax and FMR figures are directional, verify before offers · pairs with the STL Deal Sheet and the STL DSCR Deal Analyzer