Can the FHA Clause be e-signed?

Yes — electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted when they meet intent, consent, attribution, and retention requirements. Confirm lender and state RON or notarization expectations before relying solely on electronic execution.

Is notarization required for the clause?

Not uniformly. Notarization depends on state law and the document type; deeds and certain acknowledgements commonly require notary acknowledgement. Check state notary requirements and lender instructions for whether a notary or RON session is required.

What should I do if errors are discovered after signing?

Minor typographical errors often require a corrective addendum or re-execution; material changes to obligations require an amended FHA Clause Agreement signed by all parties. Notify the lender and title company immediately to avoid underwriting or recording delays, and consult counsel if needed.

Who is authorized to sign the Agreement?

Buyers, sellers, and lender representatives or authorized loan officers must sign. Entities should be represented by an authorized officer or agent, with the signing capacity indicated. Signatures should match names on loan and title documents to prevent processing issues.

Can remote online notarization (RON) be used?

Many states permit RON, subject to state-specific identity-proofing, audio-video recording, and retention rules. Verify the state's permanent RON status and follow the notary commission’s rules; if RON is not available, use in-person notarization.

How should the executed clause be delivered to the lender?

Provide the fully executed agreement, inspection reports, and repair documentation per the lender’s submission protocol. Use secure electronic submission with an audit trail or certified physical delivery, and retain copies in the loan and closing files for audit and compliance.

FHA Clause Agreement

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FHA Clause Agreement

This FHA Clause Agreement (the "Agreement") is entered into as of by and between:

Seller Name: Buyer Name:

Property Address:

WHEREAS

WHEREAS, Seller is the legal owner of the Property described above and the parties contemplate a transaction in which Purchaser will seek mortgage financing insured by the Federal Housing Administration ("FHA"); and

WHEREAS, FHA-financed transactions require certain representations, repairs, and clause insertions in the purchase documents and may require completion of repairs identified by FHA appraisal or inspection; and

WHEREAS, the parties wish to set forth their respective obligations regarding FHA-required clauses, repairs, payment, and timing in order to facilitate closing under an FHA-insured loan.

SCOPE OF WORK

Description of FHA-required repairs, clauses, inspections, and deliverables

PAYMENT TERMS

Total Amount Payable for FHA-related repairs and services

Payment Schedule: One-time payment at closing Installments

If installments, specify number and amount per installment

Late Payment: If any payment due under this Agreement is not paid within days after the due date, the delinquent amount shall incur a late fee of or a flat fee of , whichever is greater. Interest at the maximum lawful rate may also accrue on overdue amounts.

FHA COMPLIANCE; REPRESENTATIONS AND WARRANTIES

Seller represents and warrants that, to Seller's actual knowledge, the Property is free of willful concealment of defects and that Seller will, in good faith, complete or cause to be completed the repairs and corrections described in the Scope of Work so as to satisfy FHA appraisal and minimum property standards prior to closing or within any agreed cure period. Seller shall provide reasonable documentation of corrective work, receipts, permits where required, and allow reinspection by the FHA appraiser or an FHA-authorized inspector.

Buyer acknowledges and agrees that Buyer's obligation to close is contingent upon approval of the FHA-insured loan and that Buyer must timely provide loan applications, consent to appraisal and inspections, and cooperate in the scheduling of any necessary corrective work. Buyer shall timely deliver to Seller any FHA deficiency notices received that affect the Scope of Work.

INSPECTION AND REPAIRS

Seller shall commence corrective work within days after receipt of written notice of required repairs and shall complete the work within days, subject to excusable delays for weather, material shortages, or acts beyond Seller's control. Seller shall permit Buyer, contractor representatives, lenders, appraisers, and inspectors reasonable access to the Property to perform inspections and verify completion of repairs.

TERM AND TERMINATION

Term Start Date: Term End Date:

Either party may terminate this Agreement upon written notice to the other party if the terminating party reasonably determines that the FHA loan will not be approved or if the other party is in material breach and fails to cure within days after written notice. Termination shall not release either party from obligations that by their nature survive termination, including payment of amounts accrued, completion of work in progress that the parties have expressly agreed will survive, and confidentiality obligations.

CONFIDENTIALITY

Each party agrees to hold confidential all non-public information disclosed in connection with this Agreement, including repair cost estimates, contractor bids, and lender communications, and shall not disclose such information except to its attorneys, accountants, lenders, contractors, inspectors, or as required by law. This obligation shall survive termination for a period of two (2) years.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of law principles.

ENTIRE AGREEMENT; AMENDMENTS

This Agreement, together with the Scope of Work and any written exhibits or addenda expressly incorporated herein, constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior negotiations, representations, and agreements. No amendment shall be effective unless in writing and signed by both parties.

NOTICES

Seller Notice Address Buyer Notice Address

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses provided above by hand delivery, certified mail, or overnight courier, and shall be effective upon receipt.

MISCELLANEOUS

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. The parties acknowledge that no third-party beneficiaries are intended unless expressly stated. The parties shall use commercially reasonable efforts to cooperate to facilitate the FHA loan process and closing.

Seller:

By:

Date:

Buyer:

By:

Date:

What the FHA Clause Agreement Is and When It Applies

The FHA Clause Agreement is a contractual provision used in U.S. real estate transactions to document obligations and conditions when Federal Housing Administration (FHA) financing or FHA-insured mortgage products are involved. It sets out borrower and seller representations, occupancy and inspection requirements, mortgage insurance conditions, and any HUD-required disclosures tied to the FHA program. Lenders, title companies, and closing agents commonly include the clause in purchase contracts, sales addenda, or loan documents to ensure FHA eligibility and underwriting compliance. This agreement is a legal instrument; parties should consult counsel for case-specific guidance.

Why the FHA Clause Agreement Matters in FHA Transactions

Used to document FHA-specific obligations, the FHA Clause Agreement reduces underwriting delays, clarifies risk allocation between buyer and seller, and ensures required disclosures are recorded. It helps lenders and closing agents meet FHA eligibility rules while preserving negotiable contract terms.

Who Typically Prepares and Signs an FHA Clause Agreement

Lenders, closing agents, title companies, sellers, and buyers use the FHA Clause Agreement during FHA-insured mortgage transactions and closings.

Lenders and underwriters ensuring FHA eligibility and underwriting documentation requirements
Title companies and closing agents attaching required disclosures and acknowledgements
Real estate agents and sellers negotiating occupancy, repair, and financing contingencies

In many transactions multiple parties coordinate execution and recordkeeping to satisfy lender, title, and state requirements.

Representative Roles Who Sign

Loan Officer

Prepares FHA loan application, verifies borrower eligibility, orders FHA-required inspections and certifications, coordinates with the underwriter and closing agent, and confirms the FHA Clause Agreement is executed to satisfy underwriting and HUD disclosure requirements.

Seller/Agent

Reviews FHA contingencies, discloses known property defects, negotiates required repairs, ensures signatures from all parties on the FHA Clause Agreement, and works with lender and title company to meet FHA closing deliverables and timelines.

Core Elements to Include in a Professional FHA Clause Agreement

A clear FHA Clause Agreement identifies parties, key dates, occupancy terms, repair and inspection responsibilities, insurance obligations, and governing law so lenders and title companies can complete underwriting.

Parties

Identify buyer, seller, lender, and any guarantor by full legal name and role; include mailing addresses and contact information to ensure enforceability and to match loan documents and title records.

Effective Date

Specify the effective date in MM/DD/YYYY format; this date governs timing for inspection deadlines, occupancy requirements, mortgage insurance commencement, and triggers any time-limited FHA conditions.

Occupancy

State occupancy requirements explicitly (owner-occupancy representations, move-in deadlines, allowed rental periods); noncompliance can affect FHA eligibility and mortgage insurance coverage and require timely notification of any change in occupancy status.

Repairs & Inspections

Allocate responsibility for FHA-required repairs pre-closing, set inspection windows, specify acceptable contractor standards, and document who verifies completion for lender approval, including date-stamped reports and photos retained with the closing file.

Insurance

Describe mortgage insurance obligations, policy effective dates, premiums, and who pays; include seller credits or escrows related to FHA mortgage insurance when applicable and how premium changes will be communicated.

Governing Law

Specify the governing state law and dispute resolution process; clarify that ESIGN/UETA principles apply to electronic execution and address any state-specific FHA regulatory or appraisal rules.

Step-by-Step: Complete and Execute the FHA Clause Agreement

Follow these steps to complete and execute the FHA Clause Agreement accurately during an FHA transaction.

01

Prepare Document: Attach purchase contract and loan summary.
02

Complete Fields: Enter names, addresses, effective date, and occupancy terms.
03

Attach Evidence: Add inspection reports and repair estimates.
04

Sign & Deliver: Obtain signatures, notarize if required, and send to lender.

How to Configure Online Workflows for FHA Clause Agreements

Configure online settings to automate field placement, signer order, and authentication for FHA Clause Agreements.

Field	Configuration
Field Detection	Enable auto-detect; use conditional fields
Signer Order	Set lender then buyer then seller
Authentication	Use email + SMS code or KBA
Notifications	Enable reminders and completion receipts

Technical Requirements for eSigning and Sharing

Use an eSignature platform that supports PDF, DOCX, conditional fields and audit trails for FHA Clause Agreements.

File Formats: PDF and DOCX supported
Integrations: Works with Salesforce, NetSuite, Google Workspace
Authentication: Email, SMS, and advanced options

Where to Send or File the Executed FHA Clause Agreement

Typical routing: executed clause is returned to lender, recorded with title documents, and retained in closing file.

To Lender: Send signed agreement with closing package.
Title Company: Include in title commitment and closing binder.
Borrower Copy: Provide executed copy to borrower for records.
Recording: Record if state requires deed or declaration filing.

Key Deadlines and Timing to Monitor

Key dates determine FHA eligibility, repair completion, and occupancy; track each deadline closely to avoid underwriting issues.

Effective Date:

Date obligations begin; MM/DD/YYYY required

Inspection Deadline:

Complete FHA inspections before lender cutoff

Repair Completion:

Repairs finished and documented before closing

Loan Condition:

All FHA underwriting conditions cleared pre-closing

Recording Deadline:

Record deeds or declarations if required by state

How FHA Clause Agreements Differ from Other Contract Clauses

Compare how an FHA Clause Agreement differs from other contract clauses used in residential transactions, focusing on lender, occupancy, and insurance implications.

FHA Clause vs Other Contract Clauses	FHA Clause	Purchase Addendum	VA Clause	Conventional Clause
Required for FHA Loan
Mentions Mortgage Insurance		optional		optional
Occupancy Requirement	explicit	general	explicit	general
Repair Condition	lender-driven	negotiable	lender-driven	negotiable

Common Preparation Mistakes to Avoid

Failing to match borrower names across loan, title, and FHA paperwork causes underwriting delays and may require re-execution of documents or corrected affidavits.
Leaving effective dates blank or inconsistent with the purchase contract can void timing triggers for repairs, occupancy deadlines, and mortgage insurance coverage.
Using informal initials instead of full signatures when the clause requires full execution can create evidence issues during underwriting or title clearance.
Failing to attach inspection reports, photo evidence, or contractor invoices referenced in the clause often leads to last-minute cure requests and extended closing timelines.

Penalties and Risks of Incorrect or Incomplete FHA Clause Agreements

FHA Ineligibility: Loan denial or rescission

Repair Delays: Closing postponement

Insurance Gaps: Mortgage insurance denied

Financial Penalties: Repair cost allocation disputes

Tax Reporting Issues: Incorrect reporting or withholding

Title Problems: Unresolved defects delay closing

Essential Information to Capture in the Agreement

Borrower Name: Full legal name as on ID

Property Address: Street, city, state, ZIP

Loan Number: Lender-assigned loan identifier from lender

Effective Date: Enter date as MM/DD/YYYY

Occupancy Statement: Owner-occupant declaration required by lender

Signatures: All parties sign and date

eSignature Pricing and Feature Snapshot for FHA Document Workflows

Pricing and feature overview for eSignature vendors often used to complete and store FHA Clause Agreements during closing workflows.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently Asked Questions About FHA Clause Agreements

Answers to common questions about execution, notarization, electronic signing, and post-closing obligations for the FHA Clause Agreement.

Need help? Contact support

Can the FHA Clause be e-signed?
Yes — electronic signatures satisfy the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted when they meet intent, consent, attribution, and retention requirements. Confirm lender and state RON or notarization expectations before relying solely on electronic execution.
Is notarization required for the clause?
Not uniformly. Notarization depends on state law and the document type; deeds and certain acknowledgements commonly require notary acknowledgement. Check state notary requirements and lender instructions for whether a notary or RON session is required.
What should I do if errors are discovered after signing?
Minor typographical errors often require a corrective addendum or re-execution; material changes to obligations require an amended FHA Clause Agreement signed by all parties. Notify the lender and title company immediately to avoid underwriting or recording delays, and consult counsel if needed.
Who is authorized to sign the Agreement?
Buyers, sellers, and lender representatives or authorized loan officers must sign. Entities should be represented by an authorized officer or agent, with the signing capacity indicated. Signatures should match names on loan and title documents to prevent processing issues.
Can remote online notarization (RON) be used?
Many states permit RON, subject to state-specific identity-proofing, audio-video recording, and retention rules. Verify the state's permanent RON status and follow the notary commission’s rules; if RON is not available, use in-person notarization.
How should the executed clause be delivered to the lender?
Provide the fully executed agreement, inspection reports, and repair documentation per the lender’s submission protocol. Use secure electronic submission with an audit trail or certified physical delivery, and retain copies in the loan and closing files for audit and compliance.

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