Get Amendatory Clause Form On Calyx Point

The FHA amendatory clause gives you the right to back out of buying a home without losing any money if the value doesn't at least match the sales price. It's just one of many disclosures you'll sign if you take a loan backed by the Federal Housing Administration (FHA).

The reason the Federal Housing Administration requires the FHA amendatory clause is to protect the buyer(s) against a low appraisal. The FHA amendatory clause states that the buyer cannot be required by the seller to purchase the home if the appraisal is lower than the sales price listed on the sales contract.

The actual dollar amount to be inserted in the amendatory clause is the sales price stated in the contract. If the borrower and seller agree to adjust the sales price in response to an appraised value that is less than the sales price, a new amendatory clause is not required.

The FHA loan contingency offers protections to a borrower, required by FHA regulations, that are not found in a conventional loan, specifically, the Amendatory or appraisal and repairs clauses. ing to the FHA, operation of these clauses, cannot be eliminated.

If the home appraisal comes in below the agreed-upon price of a home you plan to purchase, the FHA amendatory clause enables FHA home buyers to cancel the home purchase and receive a refund of their earnest money. In short, it will allow you, the home buyer, to back out of the sale without any sort of penalty.

“It is expressly agreed that, notwithstanding any other provisions of this contract, the purchaser shall not be obligated to complete the purchase of the property described herein or to incur any penalty by forfeiture of x money deposits or otherwise unless the purchaser has been given in ance with HUD/FHA ...