Understanding Loan Types: What Sellers Should Know About Conventional, FHA, and VA Offers
When reviewing offers on your home, it’s easy to focus on the sale price — but what’s behind that offer matters just as much. The type of loan a buyer uses can impact timelines, repair requests, and even your net proceeds. As a seller, understanding the differences between Conventional, FHA, and VA loans will help you make informed, confident decisions when offers come in.
Here’s what you need to know — minus the fluff.
Conventional Loans: Flexible and Often Faster
What it is:
A traditional mortgage not backed by the government. These loans typically go through Fannie Mae or Freddie Mac and are offered by most banks and lenders.
Who uses them:
Buyers with solid credit (usually 620+), steady income, and at least 3% down (though 10–20% is more common in competitive markets).
What it means for sellers:
Fewer property condition requirements – appraisers are more lenient.
Generally faster closings – less red tape.
Strong buyer signal – especially if paired with a higher down payment.
Still subject to appraisal – and buyers may still request repairs based on inspections.
Bottom line:
Conventional offers are often seen as strong and smooth, especially if the buyer is putting down a sizable amount and using a reputable, local lender.
FHA Loans: More Accessible, More Rules
What it is:
A government-backed loan designed to help first-time and lower-income buyers. It allows lower credit scores (580+) and low down payments (as little as 3.5%).
Who uses them:
Often first-time buyers, younger buyers, or those with limited savings or average credit.
What it means for sellers:
More strict appraisal guidelines – the home must meet HUD’s “Minimum Property Standards.”
Seller may be asked to make repairs before the loan can close (versus being able to accept a seller credit to make repairs themselves after closing)
Longer closing window possible due to additional paperwork.
Good opportunity to help a buyer get into their first home, especially if your property is well maintained and you’re not in a rush to close.
Bottom line:
FHA buyers may need some extra help getting across the finish line, but with the right preparation, these offers can be just as successful.
VA Loans: Zero Down, But More Involved
What it is:
A loan guaranteed by the U.S. Department of Veterans Affairs, designed for eligible veterans, active-duty military, and surviving spouses. It allows 0% down without private mortgage insurance (PMI).
Who uses them:
Military-connected buyers using their VA benefits — many of whom are financially solid, despite the 0% down structure.
What it means for sellers:
VA buyers are often highly qualified and motivated to close.
VA appraisals are stricter than conventional, with a strong focus on safety and livability.
Appraisal timelines can be delayed, especially in rural areas or during peak seasons — expect 2–3+ weeks in some cases.
New 2024 requirement: Some buyers may be subject to a “Buyer Benefit Determination” — essentially an extra condition screening that can result in additional repairs or approval delays.
Sellers may be asked to cover certain fees VA buyers aren’t allowed to pay (pest inspections, escrow fees, etc.).
Bottom line:
Don’t write off VA offers — they can be rock solid — but you’ll want to plan for potential delays and condition-related hurdles. Having a VA-experienced agent on both sides is key.
Why This All Matters to Sellers
When you receive multiple offers, the loan type can tell you a lot about how the transaction might unfold. That doesn’t mean one loan type is better than another — but each comes with different expectations around timelines, appraisals, repairs, and who pays what.
Check out our Quick Reference Guide on Instagram @harveyrealtygroup
Final Thoughts (and What a Good Agent Does For You)
A strong real estate agent doesn't just compare offer prices — they evaluate the entire offer package to identify potential risks, manage appraisal timelines, anticipate repair requests, and protect your net proceeds. That’s exactly what I do for my clients.
Whether your best offer comes with a Conventional, FHA, or VA loan, I’ll help you understand what it means, how to prepare, and how to get to closing with minimal stress.
Ready to sell with confidence?
Let’s talk strategy — send me a message today and I’ll walk you through how I help sellers navigate offers of all kinds with clarity and confidence.
