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In basic terms, this escape clause, also known as the VA amendatory clause, allows a VA buyer to remove themselves from the loan contract if it turns out that the home they're buying is appraised at a lower value than what the seller is selling it at. The VA Escape Clause and How It Affects Your Future militarymortgagecenter.com https://militarymortgagecenter.com › va-loan-process › v... militarymortgagecenter.com https://militarymortgagecenter.com › va-loan-process › v...

Escape Clause For the Sales Contract. If the sales contract was signed by the veteran prior to receipt of the NOV, the contract must include, or be amended to include, the clause below. This clause may be found at 38 CFR 4303(k)(4) in its entirety.

The VA loan escape clause is mandatory as it protects the buyer that qualifies for a VA loan from being locked into a sale if the VA home appraisal comes back at a lesser value than the agreed upon price by the buyer and seller. The VA Amendatory Escape Clause And Its Effects - Low VA Rates lowvarates.com https://lowvarates.com › va-loan-blog › the-va-loan-esca... lowvarates.com https://lowvarates.com › va-loan-blog › the-va-loan-esca...

What Is the VA Loan Escape Clause? In plain English, the VA amendatory escape clause form means if the home's selling price is higher than the VA appraisal determines to be the reasonable value of the home, the borrower can walk even if they have already signed a contract to purchase the home.

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.

A VA escape clause is required for all VA home loan sale contracts. FHA loans have a requirement in the amendatory clause. However, other loan types, such as conventional loans, are not subject to this requirement.

An escape clause is a contractual provision that absolves one party to the contract of performance under specific conditions. An escape clause relieves one party of liability for nonperformance if certain conditions are met. Insurance policies frequently contain escape clauses.

The Escape Clause must be signed by the Veteran buyer and the seller on all VA-guaranteed purchase transactions if the sales contract was signed by the Veteran prior to receipt of the NOV. This includes contracts on new construction.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232