“How does property condition affect the loan I can use?”

cozy wooden house and chairs in autumn forestscenic view of the trees

There are a lot of different types of loans so it can be difficult knowing exactly which one to use and a lot of loans have property condition requirements that can affect whether or not a home will be approved during the appraisal process. Our goal is to find the best fit loan for you before we get to the appraisal process so we can avoid the disappointment of a property not meeting minimum standards for the type of mortgage you are approved for.

Government backed or privately backed?

Government Backed

USDA, VA, and FHA loans are more lenient when it comes to client qualifications, which helps more individuals get approved to become homeowners, but have higher requirements for property condition

Private Backed

Conventional loans can be more lenient on property condition, however, have higher client qualification standards, which tend to favor higher score and higher income buyers

In general, government backed loans require a property to be free of safety concerns and defects that could negatively affect the health and well-being of the homebuyers. These loans also require the property to be in good physical condition: meaning the property should be move in ready, not have physical damage, or defects that would cause deterioration of the property condition over time. Some examples of this would be broken windows, missing handrails, exposed wood, roof leaks, plumbing leaks, electrical failures to name a few. Conventional loans can be much more flexible in this area; however, this doesn’t mean you can be a dilapidated home with these loans. But homes requiring modest repairs are usually ok.


If the house you fell in love with doesn’t qualify for the loan type you started with, your loan officer can help review what options you have. It could be a change in loan type or advising some seller made repairs to the home or working with an agent to find a similar home that does qualify based on what you are approved for. Understanding the requirements of the home for the mortgage you are approved for, will make the home buying easier for all parties and at Georgia Mortgage Connections, we believe the path to homeownership begins with informed! Give us a call today and let us help connect you to your dream home!


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