FHA/VA LOAN ADDENDUM # TO
REAL ESTATE PURCHASE CONTRACT
THIS IS AN ADDENDUM to that REAL ESTATE PURCHASE CONTRACT (the “REPC”) with an Offer Reference Date
of , 20 , including all prior addenda and counteroffers, between
as Buyer, and as
Seller, regarding the Property located at . The
following terms are hereby incorporated as part of the REPC. All references to FHA/VA shall mean the Federal Housing
Administration/Department of Veterans Affairs.
1.
Buyer intends to occupy the Property as Buyer’s primary residence.
2.
Buyer is applying for (Check applicable box):
[
] an FHA loan; or
[ ] a VA loan.
3.
Notwithstanding the Financing & Appraisal Deadline (if applicable), Buyer SHALL NOT be obligated to complete the
purchase of the Property or incur any penalty or forfeiture of the Earnest Money Deposit or other down payment, or
otherwise be obligated to purchase the Property, if: (a) for a VA loan, the Purchase Price exceeds the reasonable
value of the Property established by the VA Certificate of Reasonable Value or VA appraisal; or (b) for an FHA loan,
the Purchase Price exceeds the appraised value of the Property (excluding closing costs) established by the FHA
appraisal. Buyer shall, however, have the right to complete the sale without regard to the amount of the appraised
valuation made by the applicable FHA or the VA. The appraised valuation is used to determine the maximum loan
that FHA will insure or VA will guarantee. Neither FHA nor the VA warrants the value or condition of the Property.
Buyer should satisfy themselves that the price and condition of the Property are acceptable. Buyer acknowledges
that an FHA/VA appraisal does not constitute a property inspection. Seller agrees to cooperate and sign any
Lender required documentation that does not substantially alter the rights and obligations of Buyer and Seller set
forth in the REPC.
4.
Seller shall make any and all appraisal required repairs, provided that the cost does not exceed $ .
5.
If required by applicable FHA or VA rules, Seller shall furnish Buyer with a current Pest Control Report showing the
Property to be free and clear from termite infestation. In the event of termite infestation, Seller shall eradicate the
same and repair any damage at Seller’s expense, provided that the cost does not exceed $ . This amount is
in addition to any amount indicated in Section 4.
6.
Seller shall contribute at Settlement an amount to be applied at Buyer’s discretion to any or all of the following: (a) a
permanent reduction, or temporary reduction, in the mortgage loan interest rate; (b) mortgage financing costs; and (c)
Prepaids/Escrows (“Closing Costs”). The amount of Seller’s contribution shall be $_________. Such contribution shall
first be applied to Closing Costs that FHA/VA will not permit Buyer to pay, and any remainder shall be allocated at
Buyer’s discretion toward remaining Closing Costs. Seller shall have no further obligation toward Closing Costs. Any
unused portion of Seller’s contribution may, at Buyer’s option, be used to reduce the Purchase Price.
7.
[APPLIES TO FHA ONLY] The undersigned hereby certify that the terms of the REPC are true to the best of our
knowledge and belief, and that any other agreement entered into by any of the parties has been fully disclosed and
is attached to the REPC.
8.
If any provision in the REPC or this ADDENDUM is inconsistent with any currently applicable law governing FHA/VA
loan transactions, then to the extent of such inconsistency, that law shall govern.
Page 1 of 2 pages Buyer’s Initials Date Seller’s Initials Date
