In a hot seller's market with multiple offers they have a hard time getting a home.  Even if their offer is really good seller will select the strongest buyer. 

VA and FHA loans have more conditions than conventional and are not nearly as strong as a conventional loan.  Often sellers will take a slightly lower offer that's conventional, over a VA or FHA loan.

Because of the property condition requirements of VA & FHA loans, older homes may not qualify for the financing.

Typically they are low down payment buyers in need of closing cost help.  And in a market where a lot of buyers don't need closing cost help, well, that can be an issue.

The appraisals can require sellers to make repairs they are not willing to make. 

It depends on the market. Sometimes conditions and attitudes play a role. The question is too broad to answer with specifics. 

Cheri Salazar in our area getting an appraisal can be a challenge. A VA appraisal takes more time and paperwork yet they pay less than other appraisals so NONE of the appraisers in our City will do them. In 2011 we had a flood that destroyed 1/4 of our City and at the same time we were an oil boom town... a VA appraisal could take 3 to 6 months to get done during that time.

In the San Francisco Bay Area, the big problem with FHA and VA loans is the maximum loan limit. Our home prices are too high for many FHA/VA buyers.

Stricter lending guidelines and less inventory available to them.

None

Condition of the property written up in the Appraisers report. What they note has to be rectified. It doesnt work well with an As Is unless buyer is willing to do the work upfront. 

I've not really had any significant challenges. And especially not with VA loans.

Delays, inaccuracies in reporting by buyers.

No real challenges on FHA as far as getting the buyer closed. The only significant FHA con to me is that the mortgage insurance doesn't go away even after one has 20+% equity. On VA, there can be a challenge as they can be picky about the home and they have their own inspector go look at the property and they sometimes find things they want handled that are not important to the buyer or seller and then you run into the - who's going to pay the fix - issue.

There are stricter lending guidelines for both. Both are stricter on the appraisals/inspections as well. There is also less inventory available to FHA & VA buyers.

The only challenge is finding condo communities that are FHA/VA approved.  I am in a market that the majority of the transaction are cash or conventional financing. 

For the buyers I have worked with, some of the challenges my buyers have dealt with for VA and/or FHA loans has been finding a house "in the buyer's price-range" where there are multiple offers ... VA and FHA loans go to the back of the bus.  Another challenge is if a house has "issues" or work needed that the seller is not willing to do (and/or the buyer cannot do) so the loan can be approved.  (eg: scrape & paint -- inside or outside; electrical issues; roof nearing end of life; mold; furnace and or structural issues)

Once again, I agree with Michael Jacobs 

They are normal transactions for first time home buyers. 

all around bad credit, they often have extra bad things pop up from years ago. It's the nature of the beast. 

Lots of work for limited payoffs.

there should be no challenges beyond what you would normally find with conventional financing..... if you use a well-versed mortgage officer, you'll have no issues....

Passing the inspection and appraisal.

With both of these loans, there could be issues addressed by appraiser that need to be repaired prior to closing.   In a bidding war, sellers tend to choose more CV loans or cash.

getting the inspection to work with them.

Many sellers do not understand these types of financing, so we do need to be prepared to educate them to make sure there is parity in the review of offers against conventional and cash

The BIGGEST challenge is buying a condo. It's important to be working with a lender that really knows the ins and outs with these loans and condo projects. 

Obviously an 840 credit score and a 20% down Fannie is easier. Plus they are not first time buyers.

The 2 biggest nagatves can be property condition, meaning needing work. The second is a seller unwilling to make repairs or pay for repairs. 

You look like a 🐇.

99% of realtors never have processed a VA loan.  Seller will decline if they had to pay for closing cost. FHA loan is sometimes popular with low end condos although the lowest I have accepted is 10% down.

Majority home sellers only entertain > 20% down with no loan contigiency. Too many buyers not enough homes for everyone for 40 years now.