Underwriting Conditions Mortgage 2026: Common PTD and PTC Items and How to Clear Them

Every mortgage approval comes with conditions. Prior-to-Draw (PTD) and Prior-to-Close (PTC) conditions must be satisfied before the lender funds. MLOs who understand the most common conditions and how to clear them proactively can compress timelines and reduce last-minute delays.

Common PTD Conditions

• ✦Updated pay stubs less than 30 days old.
• ✦Bank statements dated within 60 days.
• ✦Verbal verification of employment (VVOE).
• ✦Letter of explanation for credit inquiries, employment gaps, or large deposits.
• ✦Signed and dated mortgage application (1003).
• ✦Hazard insurance binder with lender named as mortgagee and effective date matching or preceding the closing date.

Common PTC Conditions

• ✦Final inspection or certificate of occupancy on new construction.
• ✦Appraisal re-certification of value if market conditions changed or time expired (typically valid 120 days conventional, 180 days FHA/VA).
• ✦Payoff statement for debts being paid at closing.
• ✦Executed purchase contract with all addenda including counters and extensions.
• ✦Flood certification confirming flood zone designation.

How to Clear Conditions Efficiently

Address conditions within 24 to 48 hours of underwriting approval; delays compound as conditions age. Batch document requests to the borrower to avoid multiple separate requests that erode trust. Flag conditions requiring third-party cooperation immediately, as appraiser, seller's attorney, and payoff servicer items have the longest lead times. Never close a condition with the wrong document format; a letter missing a signature will generate a condition-not-cleared response and restart the clock.