Insights
Is your Conditional Approval Program Enough?
January 6, 2026
Every property management company has its own policy when it comes to applicants who fall just below approval criteria. Some deny any applicant who does not pass their financial screening. Others, particularly those who are closely managing vacancy rates, approve some of these applicants on a conditional basis.
Here are 3 other considerations to make when you create a conditional approval program.
1. What’s your true risk tolerance?
To mitigate risk, property managers typically ask conditionally-approved applicants for an additional month’s rent. But a double deposit is just that — two months of rent coverage.
In the event of a default, will that be enough to cover lost rent should a resident skip or need to be evicted?
Will it be enough to offset the cost of vacancy until another applicant can be approved and moved in?
In many cases, you need more than just an additional rental deposit or flat fee. One way to confidently approve more residents is to use a second chance lease approval service that stands behind each approval with up to 6 months of rent loss reimbursement.
2. Are you using a diverse enough set of financial variables to qualify your conditional applicants?
Credit scores and rent-to-income are often a large part of financial screening. Our analysis shows that these parameters in isolation are not the best indicators of a potential conditionally approved resident’s ability to pay rent.
Assessing applicant risk requires a breadth and depth of financial data that constantly shifts with micro- and macro-economic conditions.
Traditional financial screening data may not maximize your occupancy or profitability. Partnering with a second chance lease approval service that uses a wide set of data can improve your chance of selecting the residents most likely to succeed. Is your financial screening process using the right data to approve applicants?
3. Is your conditional program truly equitable?
The Fair Housing Act (FHA) has many levers in place to ensure Americans have more equitable access to housing. From applications to property tours, property management companies like yours strive to stay in compliance.
While financial status is not a protected class under the FHA, consistency is the key to compliance.
When using a conditional program, it’s important that you are consistent in how you determine who qualifies for the program.
All residents who do not financially qualify should be considered for the conditional program under the same set of criteria to make sure there are no inadvertent biases.
A second chance lease approval program allows you to re-evaluate denied applications in a fair, consistent way. By channeling a wider range of applicants through standardized criteria, you strengthen compliance and ensure an equitable review process.
Benefits of a second chance lease approval program
Services such as Liberty Rent help communities reduce vacancies while eliminating the administrative burden that often comes with managing conditional approval programs.
• Improve occupancy through higher approvals. Data-rich screening that goes beyond credit score and rent-to-income ratios increases your likelihood of approving high-quality applicants who have the ability to pay their rent.
• Optimize your marketing spend. Liberty Rent’s maximizes your existing applicant pool so you don’t have to spend more money attracting new applicants.
• Improve compliance. Giving a second look at all applications that do not meet property financial requirements will reduce the risk of unintentional biases.
Liberty Rent can make your applicant qualification process more equitable while also filling your units with qualified residents. And, we stand by our approvals with up to six months of rent loss reimbursement so that you can maximize your occupancy without lowering NOI.
