Conventional Loan Home Condition Requirements

If you’re looking to finance a home with a conventional loan, you’ve likely considered the lender conditions required to qualify for a mortgage. But did you know there are conventional loan home condition requirements as well?

After all, your lender wants to ensure the home it’s financing is a sound investment. So whether you’re financing that new residence with a conventional loan versus a conforming loan (a subset of conventional loans), we’ve got the scoop on how to make sure your new home meets conventional loan home condition requirements.

What are the basic conventional loan home conditions?

Fortunately, conventional loan home condition requirements aren’t terribly strict and don’t require in-depth home inspections. As long as your proposed new residence meets the following criteria, you should have no trouble securing a conventional loan assuming you meet your lender’s borrowing requirements:

• Your home must be a single-family or multifamily dwelling with no more than four units.
• Your residence must be in the United States or one of its territories, including Guam, Puerto Rico, or the U.S. Virgin Islands.
• It has to be a residence, not a commercial property.
• The home’s title must be free of encumbrances.
• Your house must be safe for occupancy and structurally sound, including a rooftop that ensures at least two years of functionality and operational mechanical systems.
• The home must be in a location that makes it insurable for flood and other property hazards and risks.
• It has to be accessible by roads that meet local requirements and must be connected to utilities infrastructure.
• Your home must be suitable for year-round use.

What else should you consider about your home’s condition?

While most conventional home loans do not require a home inspection, you should consider getting one nevertheless. An inspection will help you purchase a structurally sound property with fully operational HVAC, electrical, and water systems. It will also help ensure no major maintenance issues will impact your ability to afford your home mortgage loan long-term.

Your mortgage lender will require a home appraisal in order to determine and/or verify your new home’s value before approving your mortgage. And while home appraisers do consider a property’s general condition, they are not equipped to provide a full home inspection to detect defects or structural issues.

Want to learn more about conventional loan home condition requirements and any additional requirements needed to qualify for a conforming loan backed by Fannie Mae or Freddie Mac? Contact an OVM Financial loan specialist today. Our team members can help you select a home loan that’s right for you. They can also address how many conventional loans you can have if you’re looking to secure financing for a second residence or a rental property.