Fha Addendum to Sales Contract PDF Form
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People also ask
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What is the FHA addendum to the sales contract?
Also called an “Escape Clause,” the FHA amendatory clause is a disclosure that gives FHA homebuyers extra protection to cancel a transaction and receive a refund of any upfront earnest money if the value of the home is below the agreed-upon sales price. -
Why is an FHA amendatory clause required?
The reason the FHA and VA require the Amendatory/Escape Clause is to protect the buyer against a low appraisal. In other words, if the appraised value is lower than the agreed upon purchase price, the seller cannot require the buyer to purchase the home. -
When must the FHA amendatory clause be signed?
3-4 AMENDATORY CLAUSE. An amendatory clause must be included in the sales contract when the borrower has not been informed of the appraised value by receiving a copy of Form HUD-92800.5B, Conditional Commitment/DE Statement of Appraised Value or VA-CRV before signing the sales contract. -
When should the FHA amendatory clause be signed?
3-4 AMENDATORY CLAUSE. An amendatory clause must be included in the sales contract when the borrower has not been informed of the appraised value by receiving a copy of Form HUD-92800.5B, Conditional Commitment/DE Statement of Appraised Value or VA-CRV before signing the sales contract. -
Is the FHA addendum required?
The buyer, co-buyer, seller, buyer's agent and seller's agent must sign the FHA amendatory clause. The FHA will not insure or guarantee the loan if it's not signed. -
What is a FHA financing addendum?
An FHA/VA financing addendum is attached to a purchase contract to state that a buyer with FHA/VA financing can back out of the sale if the appraised property value is less than the asking price. -
Who provides the FHA addendum?
The buyer, co-buyer (if applicable), seller, buyer's agent, and seller's agent are all required to sign the FHA amendatory clause before the lender performs the necessary appraisal on the home. It's required that each party involved sign the clause for the deal to go through. -
What is an example of the FHA amendatory clause?
Example: FHA Amendatory Clause The purchaser shall have the privilege and option of proceeding with consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure.
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