FAQ
What happens if the buyer’s loan falls through after attaching this addendum?
The addendum typically includes a clause stating that the contract becomes void if financing isn’t secured by a specified deadline, allowing the buyer to recover their earnest money deposit while releasing the seller from the obligation.
Can this addendum be used for both conventional and government-backed loans like FHA or VA?
Yes, but the language should be adjusted to reflect the loan type’s specific requirements. For example, VA loans may include additional clauses about appraisal contingencies, while FHA loans might specify upfront mortgage insurance terms.
Does this addendum protect the seller if the buyer’s financing falls through after inspections but before closing?
Yes, the addendum usually includes a financing contingency that, if triggered, cancels the contract and returns deposits. However, the exact protections depend on how the deadline and lender approval conditions are worded—consulting a real estate attorney is recommended for high-stakes transactions.
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