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Property Requirements for Home Loan Programs: What to Know Before Your Sell Your Home

If you live in a low to moderate income area and are trying to sell your home, you may find that even though you have interested buyers, your home doesn’t meet the requirements for their loan program. Many first-time and low-income home loan programs, such as the USDA loan, have strict standards for the property being purchased.

While many of the most common issues are easy to fix, others can cost quite a bit – but any of them can seriously impact your chances of a sale. Check out these documents regarding property requirements for USDA loans for more information about what you may be up against.

Wells
If your home is in a rural area, you may run into issues regarding your well and septic system. Depending on where you live and what is considered “normal” for your area, your property may not qualify due to the type, size or placement of its water and sewer systems.

Make sure to have your systems checked by a licensed inspector prior to putting your property on the market. Be aware that you may need to re-drill your well or even excavate and replace your septic system before you can close on your sale.

Damages
Most buyers are looking for a home in great condition. Low-income home loan programs are looking for that too – but they aren’t prepared to budge and there is no negotiating when it comes to minor damages.

Make sure to patch and repair all walls, floors, windows, light fixtures, roofing materials, sideboards – you get the picture. Right on down to the electrical outlets, your house needs to be in good shape to qualify. It is common for a house to require extensive repair work before closing, even when it is in “fair” condition. Luckily, these repairs are fairly straightforward – paint, plaster, elbow grease and time can take care of most issues. Everything else, like shingles, siding repairs and re-fencing can be taken care of by a contractor for a fair price.

Safety
Your home doesn’t need to just be in great shape, it also needs to be safe. Missing or broken fire alarms and stair rails are common issues noted in inspection documents. Other issues you might expect to find are plastered over electrical junctions, old wiring and dilapidated exterior structures, such as your old shed, deck or carpark.

If your buyers are using a government backed or guaranteed loan, you will need to address these issues before you can close. Some of them can be simple to fix, others – like replacing decks or wiring, may require more work. Make sure you check with your city offices regarding permits before removing buildings, decks or starting any large renovation projects.

Basics Functional and legal electrical, water, sewer and HVAC systems inside the home and grounds are a must. The house must be structurally sound and free of any major defects, including water and smoke damage. There should be little to no damage to the foundation or basement and it is also worth noting that the house must also be clean and ready for move-in to pass inspection.

Unfortunately, for many sellers meeting these loan requirements can cost more time and money than they can afford to spend. Fortunately, these repairs are not required for all sales.

​Contact Seller’s Advantage online or call us at 1-800-208-3243 to get a no-cost, no-obligation quote on your home. We purchase homes in AS-IS condition and can give you a cash offer in as little as 24 hours.

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