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I'm currently in the waiting stage of my home purchase. Currently waiting for my appraisal to be done and after that underwriting.
I asked my loan officer if I can get a conditional loan approval before my appraisal gets done in case something checks out and I get denied. Loan officer told me that my conditional loan approval was done when I gave all my paperwork and documents and was run through the automated underwriter system.
Is the conditional loan approval done through the desktop software or manually by an underwriter?
Both. Upon getting an "Approve/Eligible," DU/DO lists the conditions, which include manual verification of all of the components that were entered into the system to get the approval. An underwriter reviews those manual verifications so as to support and confirm the approval. If they are not supported, the file is suspended, moved to a Manual Underwrite status, or declined.
You will receive a list of items needed once underwriting has reviewed the file, appraisal and all. This is the true Conditional Approval.
Conditional Approvals are pretty much hypothetical until every document and confirmation is obtained. Your LO can send you the actual DU decision, complete with required items. NOTE: every lender has different Overlays that add requirements on top of DU Findings, thus further diminishing the legitimacy of any automated approval.
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