Fold Housing has been told the scheme does not include enough new space for economic or business use.
It wants to build 244 homes, a community centre and business units on the site.
When land used for employment purposes is being redeveloped it must include a "significant" economic use element.
The planning service said that the business unit element is currently too small to be considered "significant".
The development has been opposed by some local residents who object to the loss of a site that was previously used for employment purposes.
They said any development should be focused on bringing jobs back to the area.
Patrick Crossan, from the Campaign For Economic Regeneration Of The Former Visteon Site, said they have been vindicated by the planners' findings.
He said: "From a west Belfast point of view there are 28 other sites which have been identified for social housing, why don't we use those up first before hitting those that could be used for economic regeneration?"
Fold Housing said it is now looking at a number of options for a revised scheme, but that it does not intend to reduce the number of houses.
The planners have also said any planning permission should also include an agreement to ensure the business units are completed before the houses are occupied.
The Visteon factory closed in controversial circumstances in 2009 with the loss of more than 200 jobs.
The factory sat in a visually prominent site next to the M1 motorway, but has now been almost entirely demolished.
A report prepared for Fold by property consultants Lisney said the site was "considered unsuitable for the creation of large scale, major employment-generating activities".
Lisney cited its proximity to homes, lack of motorway access and significant costs of clearing the site and making sure it was free of any contaminants.
Taking these factors together, it said there was a "major barrier to commercial development".
The firm revealed that Tesco had at one time expressed an interest in developing a supermarket on the site, but did not take the project forward for access and planning reasons.
The report also said the west Belfast firm Deltaprint had considered relocating to the site, but instead decided to expand its existing factory at Kennedy Way.
A housing association has been told it must revise its plan to redevelop the former Visteon factory site in west Belfast.