Can a financing clause be electronically signed?

Yes. Electronic signatures are recognized under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted. Ensure signer intent, consent, attribution, and reliable record retention to meet the legal validity test.

What if the lender denies the loan?

Follow the clause language: typically the buyer must provide written notice and proof of denial. If the clause allows, earnest money is returned or the buyer may terminate within the stated cure period.

Is notarization required for the clause?

Notarization is not typically required for the clause itself, but related instruments (deeds, mortgages) generally require notarization and county recording per state law; verify local requirements.

Who must sign the financing clause?

All contracting parties whose obligations are affected should sign. If a party is an entity, an authorized officer or agent must sign with title indicated.

Can the clause be amended after signing?

Yes, by written amendment signed by all parties. Document any extensions or revised deadlines in a signed addendum to preserve enforceability.

How do I prove the clause was agreed remotely?

Maintain an audit trail with timestamps, IP addresses, signer authentication records, and retained signed copies. These items support attribution and record retention under ESIGN/UETA.

Electronic Signature
Templates
Real estate
Financing Clause for Real Estate

Financing Clause for Real Estate

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Financing Clause for Real Estate

Parties and Effective Date

This Financing Clause is incorporated into and forms part of the Purchase Agreement effective as of (the Effective Date), between:

Buyer Name: Buyer Contact (address, phone): Seller Name: Seller Contact (address, phone):

Property Identification

Property Address: Parcel / APN Number: Legal Description:

Financing Terms and Conditions

Purchase Price: $ . Earnest Money: $ to be held in escrow in accordance with the Purchase Agreement.

Requested Loan Amount: Loan Type (select all that apply):

Conventional FHA VA USDA Seller Financing Other:

Interest Rate Cap (maximum allowable initial interest rate for contingency purposes): . Loan Term: months.

Financing Contingency Period

Buyer shall use good faith efforts to obtain a written loan commitment from a lender on the terms set forth above by (the Commitment Deadline), which date shall be the deadline for satisfaction of this financing contingency.

Financing Contingency Duration (if measured in days):

If Buyer fails to provide written notice to Seller of a satisfactory loan commitment on or before the Commitment Deadline, Buyer shall be deemed to have elected one of the following remedies by delivering written notice within three (3) business days after the Commitment Deadline (select applicable option below):

Terminate the Purchase Agreement and receive return of earnest money pursuant to escrow instructions.

Proceed to Closing without financing contingency (Buyer expressly waives financing contingency in writing).

Appraisal and Underwriting

Appraisal Contingency: Unless Buyer waives the contingency in writing, this financing contingency is conditioned upon an appraisal of the Property at a value at least equal to the Purchase Price. If the appraised value is less than the Purchase Price, Buyer may:

Terminate the Purchase Agreement and receive earnest money in accordance with escrow instructions.

Request renegotiation of the Purchase Price; if parties do not agree within days, Buyer may terminate.

Buyer shall promptly deliver any appraisal or underwriting objections to Seller. Buyer acknowledges that lender underwriting requirements may impose conditions beyond those set forth herein and that satisfaction of lender conditions is Buyer’s obligation.

Buyer Obligations and Cooperation

Buyer shall, at Buyer’s expense, promptly submit loan applications, execute lender-required documents, provide accurate financial information, attend inspections required by lender, and otherwise cooperate in the processing of the loan. Buyer authorizes Seller and escrow to deliver documents and information reasonably requested by the lender.

Buyer Additional Obligations (if any):

Default, Remedies and Earnest Money

If Buyer breaches the obligations under this clause or fails to timely elect a remedy as required, Seller shall be entitled to pursue remedies under the Purchase Agreement, including exercising rights to the earnest money as liquidated damages. Nothing in this clause prevents either party from seeking specific performance where authorized by law.

Disposition of Earnest Money upon Buyer Default (select applicable):

Earnest money forfeited to Seller as liquidated damages. Earnest money returned to Buyer.

Waiver, Extension, and Notices

Buyer may waive the financing contingency only by delivering a written waiver to Seller prior to the Commitment Deadline. Any extension of the Commitment Deadline must be agreed in writing and signed by the parties. All notices required under this clause shall be delivered in accordance with the notice provisions of the Purchase Agreement.

Extension Agreed (days):

Representations and Disclaimers

Buyer represents that the financial information provided to any lender will be true and complete. Seller makes no warranty or representation regarding Buyer’s ability to obtain financing, and Seller shall not be obligated to alter the Property or the Purchase Price to obtain financing for Buyer.

Governing Law; Entire Agreement

This Financing Clause is governed by the laws of the state of and constitutes the entire financing understanding between the parties with respect to the subject matter hereof, superseding any prior financing statements between the parties.

Acknowledgment

By signing below the parties acknowledge that they have read and understand the terms of this Financing Clause and agree that compliance with these terms is a condition precedent to closing where applicable.

Buyer Printed Name:

By:

Date:

Seller Printed Name:

By:

Date:

What the Financing Clause for Real Estate Does

A Financing Clause for Real Estate is a contractual provision inserted into a purchase agreement that conditions the buyer's obligation to close on obtaining specified financing. It sets target loan terms, required commitment dates, and the buyer's remedies if a lender fails to deliver a loan commitment. The clause allocates risk between buyer, seller, and lender, and commonly specifies actions like good-faith loan applications, notice deadlines, inspection timing, and the extent to which deposits are refundable if financing is not secured.

Why Including a Clear Financing Clause Matters

A precise financing clause reduces ambiguity about who bears financing risk, preserves earnest money in lender denials, and provides enforceable timelines for loan approval and commitment. It protects both parties by documenting expectations and remedies tied to the loan process.

Who Typically Prepares and Signs This Clause

The financing clause is prepared by transaction counsel or the buyer's agent and reviewed by lenders and title companies before closing.

Buyer agents and purchasers who need lender-dependent contingencies and clear exit paths.
Sellers and listing agents seeking certainty on deposit forfeiture and cure periods.
Lenders and mortgage brokers who require specified deadlines and documentation commitments.

All parties should confirm language aligns with loan commitment processes and state recording or notarization rules prior to execution.

Stepwise Process to Complete the Financing Clause

Follow these steps to draft, review, and finalize the financing clause so it matches lender requirements and closes on schedule.

01

Draft terms: Define loan type, amount, and deadline.
02

Confirm with lender: Verify acceptability of terms and required conditions.
03

Review with counsel: Have attorney check contingency language.
04

Execute and serve: Sign, date, and distribute to all parties.

How to Configure the Clause for Online Completion

Configure digital fields and authentication so e-signed clauses meet evidentiary and lender requirements.

Field \| Configuration	Field Type \| Required/Conditional
Authentication	Email + SMS code recommended for signer attribution
Conditional Fields	Show commitment date only if loan type is financing-contingent
Deadline Reminders	Automated reminders at 7 and 3 days before deadline
Integrations	Connect to title or loan platforms for document exchange

Where to Send the Completed Financing Clause

After execution, route signed clauses to the lender, title company, and all contract parties to ensure timely processing and recording.

Lender Delivery: Provide signed copy to lender for underwriting and commitment.
Title Company: Send to title for clearance and pre-closing review.
Seller / Agent: Distribute to seller and listing agent for records.
Recording Office: Transmit documents that require county recorder filing.

Digital Format and Integration Considerations

Use interoperable file formats and signer authentication that meet lender and title company standards.

Supported Formats: PDF, DOCX, HTML, Excel
Integrations: Salesforce, NetSuite, Google Workspace
Authentication Options: Email, SMS code, KBA, SSO

Confirm the receiving party accepts electronic copies and e-signatures under ESIGN/UETA before relying solely on e-submission.

Typical Deadlines and Timing Expectations

Financing clauses usually set explicit application, approval, and commitment dates; use realistic windows that reflect lender processing times.

Loan Application Deadline:

Buyer must apply within 7–14 days of contract execution.

Rate Lock Window:

Lock period typically 30–45 days before closing.

Commitment Date:

Lender must deliver commitment by MM/DD/YYYY deadline.

Financing Contingency Term:

Contingency often expires 21–45 days after contract.

Closing Date:

Final closing scheduled per purchase agreement.

Common Preparation Errors to Avoid

Vague deadline language that leaves open interpretation and disputes over when obligations accrue.
Omitting lender conditions such as appraisal or title exceptions that can void a commitment unexpectedly.
Failing to coordinate dates with loan rate locks, leading to unanticipated costs or denial.
Neglecting to state remedies clearly—whether earnest money returns, extension rights, or termination options.

Consequences of an Incorrect or Missing Financing Clause

Contract Termination: Buyer or seller may terminate

Deposit Risk: Earnest money may be forfeited

Delay Costs: Carry or interest costs accrue

Lender Denial: Transaction may fail to close

Recording Issues: Improper documents can be rejected

Legal Disputes: Litigation or specific performance claims

Security, Compliance, and Technical Safeguards to Require

ESIGN / UETA: Use for e-signature legal validity

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Audit Trail: Timestamps, IP, and signer events

BAA Availability: Required for HIPAA-covered data

21 CFR Part 11: Needed for regulated records

Access Controls: SSO, MFA, and role-based permissions

Real-World Examples and How Clauses Were Used

Two brief case narratives show practical clause drafting and the operational outcomes when lender conditions were or were not met.

Martin Properties — Mobile Closings

Tim Martin streamlined remote closings using e-signed financing clauses to match lender timelines.

The clause specified a 30-day commitment deadline.
The clear deadline and required documentation reduced closing delays and ensured earnest money handling followed the parties' agreed remedies.

Optica Ventures — Investor Purchase

Optica used a financing clause to tie investor bridge financing to a firm commitment.

Clause required lender commitment and funding within 45 days.
When an investor delayed, the clause's termination path protected the purchaser and preserved a portion of the deposit.

eSignature Vendors: Pricing and Feature Snapshot for Financing Clauses

Comparison of common eSignature vendors used to execute financing clauses. signNow is listed first for direct feature and price reference.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes, limited	Yes, limited
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 Financing Clauses

Answers to common execution, enforceability, and e-signature questions for financing clauses used in U.S. transactions.

Need help? Contact support

Can a financing clause be electronically signed?
Yes. Electronic signatures are recognized under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted. Ensure signer intent, consent, attribution, and reliable record retention to meet the legal validity test.
What if the lender denies the loan?
Follow the clause language: typically the buyer must provide written notice and proof of denial. If the clause allows, earnest money is returned or the buyer may terminate within the stated cure period.
Is notarization required for the clause?
Notarization is not typically required for the clause itself, but related instruments (deeds, mortgages) generally require notarization and county recording per state law; verify local requirements.
Who must sign the financing clause?
All contracting parties whose obligations are affected should sign. If a party is an entity, an authorized officer or agent must sign with title indicated.
Can the clause be amended after signing?
Yes, by written amendment signed by all parties. Document any extensions or revised deadlines in a signed addendum to preserve enforceability.
How do I prove the clause was agreed remotely?
Maintain an audit trail with timestamps, IP addresses, signer authentication records, and retained signed copies. These items support attribution and record retention under ESIGN/UETA.

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