The Most Common Reasons VA and FHA Loans Get Delayed in 2026 (And How to Avoid Them)

VA and FHA loans both offer powerful benefits to eligible homebuyers, but they come with additional layers of review that conventional loans do not. The result is avoidable delays that push closing dates back by days or even weeks. 

Most of the time, these setbacks trace back to a handful of recurring issues: property condition problems, incomplete documentation, appraisal disputes, and financial changes made after pre-approval. Knowing where the process breaks down is the first step toward closing on time.

Why Government-Backed Loans Face More Scrutiny

Both VA and FHA loans are backed by the federal government, which means lenders must follow strict guidelines. The VA requires that homes meet its Minimum Property Requirements (MPRs), and HUD sets its own Minimum Property Standards (MPS) for FHA-insured loans. These property safeguards protect borrowers, but they also introduce more checkpoints where delays can occur.

VA Loan Delays: The Most Common Culprits

1. A Missing or Incomplete Certificate of Eligibility

Before any lender can close a VA loan, they need to confirm the borrower's eligibility through a Certificate of Eligibility (COE). Veterans typically establish this with a DD-214, while active-duty service members use a current Statement of Service. Guard and Reserve borrowers often need points statements or specific activation orders.

Problems arise when borrowers wait until they are already under contract to request the COE, or when they submit incomplete service documentation. Missing or incorrect records can stall eligibility review for days. The fix is straightforward: request your COE early in the homebuying process, before you begin making offers. Many lenders can pull it in minutes through the VA's automated system, but that only works when your service records are complete and accurate in VA systems.

2. VA Minimum Property Requirement Failures

VA appraisers do not just estimate value. They also assess whether a home meets the VA's MPRs, which require the property to be safe, structurally sound, and sanitary. Common findings that halt closings include peeling paint on older homes, inadequate drainage, roof damage, exposed electrical wiring, and water heaters that lack proper safety features.

When an appraiser identifies an MPR deficiency, the closing cannot proceed until the issue is corrected and re-inspected, or signed off by the lender in some cases. This can add one to three weeks to the timeline depending on contractor availability. Buyers can get ahead of this by screening properties before making an offer. Working with a real estate agent familiar with VA transactions helps considerably, since they can advise on which property types tend to generate MPR conditions.

3. A Low or Contested Appraisal

If a VA appraisal comes in below the agreed-upon purchase price, the loan cannot proceed at the contracted amount. The VA's Tidewater Initiative allows lenders to provide additional comparable sales data before the appraiser finalizes a low value, but it does not guarantee a different outcome. 

Buyers can negotiate with the seller to lower the price, pay the difference out of pocket, or walk away using the VA's escape clause. Any of those paths takes time.

Making offers that reflect realistic market values, supported by solid comparable sales, is the most reliable way to avoid this situation altogether.

4. Employment or Income Changes During the Process

Lenders verify employment at the start of the loan and again just before closing. A job change, even a lateral move for higher pay, triggers a full re-verification and can require new income documentation, updated pay stubs, and sometimes a written explanation letter from the new employer. 

Self-employment that begins during the loan process is especially problematic, since VA guidelines generally require a two-year history of self-employment income before it can be counted.

The same applies to any significant income changes, such as an expiring contract, a reduction in overtime, or a drop in commission earnings. The clear guidance: do not change jobs between application and closing without first consulting your loan officer.

5. Residual Income Shortfalls

One qualification factor that catches VA borrowers off guard is residual income. After accounting for the new mortgage payment and all existing debts, borrowers must have a minimum amount of money left over each month, based on family size and geographic region. The VA sets these thresholds to ensure long-term financial stability, and there is no direct equivalent in most conventional loan programs.

A borrower can have an acceptable debt-to-income ratio and still fall short on residual income. This often surfaces late in underwriting and requires restructuring the loan, paying down existing debt, or documenting additional income. Running the residual income calculation during pre-approval, rather than at the end, prevents last-minute surprises.

FHA Loan Delays: Where Things Go Wrong

1. Property Condition Problems That Fail HUD Standards

FHA appraisals carry dual requirements: they determine market value and verify that the home meets HUD's Minimum Property Standards. Properties that fail include those with roof damage, lead-based paint issues in pre-1978 homes, structural deficiencies, and drainage problems. Chipped or peeling paint is a particularly common trigger in older housing stock.

Once an FHA appraiser flags a condition issue, closing is on hold until repairs are completed and certified. Some lenders will allow a repair escrow for minor items, but significant structural work must typically be finished before loan approval. Buyers financing a fixer-upper should consider whether an FHA 203(k) renovation loan is a better fit than a standard FHA purchase loan.

2. Documentation Gaps in Underwriting

FHA underwriters scrutinize income, employment history, assets, and liabilities closely. Large deposits in bank statements without a clear paper trail are a frequent source of conditions that slow the file. Borrowers who recently changed jobs, work in non-traditional employment, or have gaps in employment history should expect to provide additional documentation.

Self-employed borrowers and those with significant rental income typically go through manual underwriting, which takes more time. Preparing two years of tax returns, a current profit and loss statement, and a clean employment history before applying eliminates most of the back-and-forth.

3. Credit or Debt Changes After Pre-Approval

Pre-approval is based on a snapshot of your financial profile at a specific point in time. Taking on new debt between pre-approval and closing, whether a car loan or a new credit card, can raise your debt-to-income ratio enough to jeopardize approval. Even a modest credit score drop can affect the loan terms you were approved under.

Lenders typically pull a soft credit check close to closing as a final verification. Any new liabilities discovered at that stage can trigger new documentation requirements or, in more serious cases, a formal re-underwrite of the file. Keep your credit profile stable from the moment you apply until after closing is complete.

4. Condominiums Without FHA Project Approval

Buyers purchasing a condo with FHA financing often do not realize that the entire condo project must hold active approval with HUD. A unit that looks perfectly eligible can be disqualified if the broader association has not maintained its FHA approval or has too many investor-owned units. Checking the HUD FHA Condominiums page before making an offer on a condo saves time and avoids a costly mismatch.

Delays That Affect Both Loan Types

The Closing Disclosure Three-Day Rule

Regardless of loan type, federal law requires that borrowers receive their Closing Disclosure at least three business days before closing. This waiting period is mandatory and cannot be waived except in extremely rare financial emergencies. If there is a significant change to the APR, the loan product, or a prepayment penalty after the disclosure has already been issued, the three-day clock resets entirely.

Borrowers who review the Closing Disclosure as soon as it arrives and compare it carefully against their earlier Loan Estimate can flag and resolve discrepancies before closing day rather than at the table.

Title and Lien Issues

Outstanding liens, unpaid property taxes, or unresolved judgments can freeze any transaction until they are cleared. Title searches sometimes surface issues that take weeks to resolve, particularly when estates, divorces, or previous foreclosures are in a property's history. Ordering the title search early and addressing any clouds on title promptly keeps the timeline intact.

How to Keep Your Loan on Track

• For VA borrowers: Request your COE before shopping. Have your DD-214 or Statement of Service, two months of bank statements, 30 days of pay stubs, and W-2s for the past two years ready to go.
• For FHA borrowers: Avoid any new credit inquiries or major purchases from application through closing. Prepare documentation for any large bank deposits before your lender asks.
• For all government-backed loans: Work with a lender experienced in VA or FHA transactions, respond to every underwriter request immediately, and avoid any financial changes until after your loan has closed and recorded.

Ready to explore your VA loan options? Visit the NewDay USA Learning Center for more resources built specifically for Veterans and their families.

FAQs

How long does a VA loan typically take to close? 

VA loans generally close in 40 to 50 days, though well-prepared borrowers working with experienced lenders often close closer to 30. Delays tend to cluster around appraisal issues, missing documents, and underwriting conditions.

Can a VA appraisal fail a property? 

A VA appraiser does not technically "fail" a property the way a home inspector might. Instead, the appraiser issues a Notice of Value with conditions if Minimum Property Requirements are not met. Closing cannot proceed until those conditions are resolved.

What credit score is required for an FHA loan? 

HUD sets the minimum credit score for FHA loans at 500, but borrowers need a score of at least 580 to qualify for the 3.5% minimum down payment. Individual lenders may apply higher score requirements of their own.

Will changing jobs before closing delay my loan? 

Almost certainly. Both VA and FHA lenders verify employment twice: at application and again before closing. A job change triggers additional verification that can push your closing date back by a week or more. Consult your loan officer before making any employment change during the loan process.

Does a low appraisal mean the deal is over? 

Not necessarily. For VA loans, the escape clause protects buyers, and sellers can negotiate a lower price. For FHA loans, buyers and sellers have similar options. If both parties are motivated, a low appraisal often leads to renegotiation rather than a canceled contract.