House Condition & Your Home Loan

house condition and your home loan


We love meeting new home buyers and finding out all their dreams, wants, and needs in a new home. We always ask people what condition they would like the house in – are you super handy, do you want totally turn-key, are you ok with painting and cosmetic stuff?


The most common reply we get is, “I can paint, but I don’t want to deal with big stuff like a foundation.” Then we start seeing houses, and it turns out there is either a lot they don’t want to do OR the inevitable turn of “we will take a fixer-upper.”

While we love a good renovation and want the before and after pics, your loan type may not allow you to buy a home unless it’s in a certain condition.




There are certain guidelines a house must meet for it to pass an FHA loan. If you see any of the following items, your house will get flagged by the appraiser and will need to be repaired before closing:

        • Missing tiles or shingles on a roof
        • Cracked windows panes
        • Chipped or peeling paint
        • No hot water
        • Less than 18’ clearance for a raised home
        • Cracked slab
        • AC and heating not functioning
        • Missing handrail/s


Some of these items may make sense to you, but others question the paint and window panes and argue it’s an easy fix. While I agree it is, we may have to get it repaired before moving forward.


The Federal Housing Administration insures an FHA loan, and it’s all about safety with them.  If the house was built before 1978 (most homes in New Orleans were), they could potentially have lead-based paint. They will not require cosmetic updates as long as the rest of the house meets their safety, security, and soundness standards.

A good, experienced agent knows what to look for if you’re using an FHA loan.




VA Loan

If you thought the FHA loan was strict, wait to see some of the VA house condition requirements. Be prepared to get flagged for the following:

          • The heating must work properly (crazy that it’s not AC in New Orleans)
          • Wood destroying insect report must be turned in showing there are no active termites or substantive damage
          • Crawl space must be dry
          • Carpet must be free of any trip hazards
          • The roof must have life left on it
          • And all of the same FHA requirements listed above

VA appraisers will pick the house apart. We may have to ask the seller to make some additional repairs after the appraisal is complete. However, sellers are not required to do so!




Conventional loan

Conventional loans allow you to get funding without being so strict about the property condition. Now, they will not pass a home that has holes in the walls and is partially gutted, but it will give more leeway.

Items that will be flagged for a conventional loan are:

          • Mold
          • Curling roof shingles
          • Active roof leak
          • Foundation issues
          • No plumbing fixtures
          • Missing flooring



You should work with an experienced New Orleans real estate agent who knows what items will be a problem during the appraisal! They can save you time, money, and heartache.



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