Financing Con ngency Clause Samples
A Financing Contingency clause allows a party, typically the buyer in a transaction, to make the agreement dependent on their ability to secure financing under specified terms. In practice, this means the buyer is not obligated to complete the purchase if they are unable to obtain a loan or other necessary funding within a set timeframe, and may be able to terminate the contract without penalty. This clause protects buyers from being forced to proceed with a purchase they cannot afford, thereby allocating risk and ensuring that transactions only move forward when financing is secured.
Financing Con ngency. (Strike if not applicable)
5.1 This o er is con ngent upon Buyer obtaining from an insurance company, financial ins tu on or other lender, a commitment to lend to Buyer a sum equal to at least % of the Purchase Price, on terms acceptable to Buyer. Such loan ("New Loan") shall be secured by a first deed of trust or mortgage on the Property. If this Agreement provides for Seller to carry back junior financing, then Seller shall have the right to approve the terms of the New Loan. Seller shall have 7 days following receipt of the commitment se ng forth the proposed terms of the New Loan to approve or disapprove of such proposed terms. If Seller fails to no fy Escrow Holder, in wri ng, of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan.
5.2 If Buyer shall fail to no fy its Broker, Escrow Holder and Seller, in wri ng within days following the Date of Agreement, that the New Loan has not been obtained, it shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan con ngency.
5.3 If Buyer shall no fy its Broker, Escrow Holder and Seller, in wri ng, within the me specified in paragraph 5.2 hereof, that ▇▇▇▇▇ has not obtained said New Loan, this Agreement shall be terminated, and Buyer shall be en tled to the prompt return of the Deposit, plus any interest earned thereon, less only Escrow Holder and Title Company cancella on fees and costs, which Buyer shall pay.