FHA

The FHA amendatory clause is a key protection for both buyers and lenders in real estate transactions involving an FHA loan, allowing the buyer to back out without penalty if a home’s appraised value is less than the sale price. This clause must be signed by both parties, with no exceptions, and is an integral part of FHA’s flexible loan program designed to help first-time buyers with benefits like low down payments and competitive interest rates. Sellers can renegotiate or cancel the transaction if necessary, maintaining a fair market.