11-2-2015
TREC NO. 40-7
B. APPROVAL OF FINANCING: Approval for the financing described above will be deemed to have
been obtained when Buyer Approval and Property Approval are obtained.
1. Buyer Approval:
This contract is subject to Buyer obtaining Buyer Approval. If Buyer cannot obtain Buyer
Approval, Buyer may give written notice to Seller within days after the effective
date of this contract and this contract will terminate and the earnest money will be
refunded to Buyer. If Buyer does not terminate the contract under this provision, the
contract shall no longer be subject to the Buyer obtaining Buyer Approval. Buyer
Approval will be deemed to have been obtained when (i) the terms of the loan(s)
described above are available and (ii) lender determines that Buyer has satisfied all of
lender's requirements related to Buyer’s assets, income and credit history.
This contract is not subject to Buyer obtaining Buyer Approval.
2. Property Approval: Property Approval will be deemed to have been obtained when the
Property has satisfied lender’s underwriting requirements for the loan, including but not
limited to appraisal, insurability, and lender required repairs. If Property Approval is not
obtained, Buyer may terminate this contract by giving notice to Seller before closing and the
earnest money will be refunded to Buyer.
3. Time is of the essence for this paragraph and strict compliance with the time for
performance is required.
C. SECURITY: Each note for the financing described above must be secured by vendor’s and deed
of trust liens.
D. FHA/VA REQUIRED PROVISION: If the financing described above involves FHA insured or VA
financing, it is expressly agreed that, notwithstanding any other provision of this contract, the
purchaser (Buyer) shall not be obligated to complete the purchase of the Property described
herein or to incur any penalty by forfeiture of earnest money deposits or otherwise: (i) unless
the Buyer has been given in accordance with HUD/FHA or VA requirements a written statement
issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct
Endorsement Lender setting forth the appraised value of the Property of not less than
$ ; or (ii) if the contract purchase price or cost exceeds the reasonable
value of the Property established by the Department of Veterans Affairs.
(1) The Buyer shall have the privilege and option of proceeding with consummation of the
contract without regard to the amount of the appraised valuation or the reasonable value
established by the Department of Veterans Affairs.
(2) If FHA financing is involved, the appraised valuation is arrived at to determine the
maximum mortgage the Department of Housing and Urban Development will insure. HUD
does not warrant the value or the condition of the Property. The Buyer should satisfy
himself/herself that the price and the condition of the Property are acceptable.
(3) If VA financing is involved and if Buyer elects to complete the purchase at an amount in
excess of the reasonable value established by the VA, Buyer shall pay such excess amount
in cash from a source which Buyer agrees to disclose to the VA and which Buyer represents
will not be from borrowed funds except as approved by VA. If VA reasonable value of the
Property is less than the Sales Prices, Seller may reduce the Sales Price to an amount equal
to the VA reasonable value and the sale will be closed at the lower Sales Price with
proportionate adjustments to the down payment and the loan amount.
E. AUTHORIZATION TO RELEASE INFORMATION:
(1) Buyer authorizes Buyer’s lender to furnish to Seller or Buyer or their representatives
information relating to the status of the approval for the financing.
(2) Seller and Buyer authorize Buyer’s lender, title company, and escrow agent to disclose and
furnish a copy of the closing disclosures provided in relation to the closing of this sale to the
parties’ respective brokers and sales agents identified on the last page of the contract.
Buyer Seller
Buyer Seller
Third Party Financing Addendum Concerning Page 2 of 2
(Address of Property)
This form has been approved by the Texas Real Estate Commission for use with similarly approved or promulgated
contract forms. Such approval relates to this form only. TREC forms are intended for use only by trained real estate
license holders. No representation is made as to the legal validity or adequacy of any provision in any specific
transactions. It is not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX
78711-2188, (512) 936-3000 (http://www.trec.texas.gov) TREC No. 40-7. This form replaces TREC No. 40-6.
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