Each underwriting condition is one request with one answer. When an underwriter issues a conditional approval, the conditions arrive as a numbered list, and the loan reaches clear to close once every item on that list is signed off.
When each condition has to be met
Underwriters sort conditions by deadline:
- Prior to documents (PTD). These must be cleared before the lender prepares the closing package. Most conditions about income, assets and credit live here.
- Prior to funding (PTF). These can be cleared at the closing table or just after, before the lender wires the money. A final verbal check of employment is the classic example.
- At closing. Items signed or collected at the table itself, such as a corrected document or a payoff check.
Some conditions are yours to answer, and others wait on third parties such as the appraiser, the title company, your insurance agent or your employer's payroll office.
Common conditions by subject
| Subject | Typical condition |
|---|---|
| Income | Pay stub from the last 30 days, written verification of employment, letter about a job gap |
| Savings | Two months of statements with every page, source of a large deposit, gift letter and proof of transfer |
| Credit | Letter about recent inquiries, proof a disputed account is resolved |
| Property | Appraisal and any required repairs, homeowners policy with wind coverage, flood zone determination |
A funds condition, worked out
An FHA buyer is purchasing a $300,000 home. The 3.5% down payment is $10,500. Closing costs and prepaids come to $11,200, and the seller agreed to a $6,000 credit, which leaves $5,200 for the buyer. The $2,000 earnest money deposit already counts toward the total.
Cash due at closing: $10,500 + $5,200 − $2,000 = $13,700.
The buyer's checking statement shows $12,400, so the underwriter writes a condition to verify $1,300 more. The buyer's father gives $2,500. FHA allows gift funds from family, so the condition is cleared with a signed gift letter and the record of the transfer. Verified funds rise to $14,900, which covers the $13,700 with $1,200 left over.
Clearing conditions without delays
Answer each condition the day it arrives, and send full PDFs with every page. Keep written explanations to a few factual sentences with dates. Don't move money between accounts without a statement showing where it went, and don't open new credit before closing. If a condition is unclear, ask your loan officer what exact document satisfies it before you send anything.
Run your price, down payment and seller credit through the cash to close calculator so a funds condition never catches you short. When a condition on your approval reads like a riddle, call AAA Capital Funding at 888-601-8344 and we'll tell you what clears it.