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M.S.B.A. Real Property Form No. 2 (2008, 2017) Financing Addendum for Conventional or Privately Insured Mortgage FINANCING ADDENDUM / Page 1 of 3 FINANCING ADDENDUM FOR CONVENTIONAL OR PRIVATELY INSURED MORTGAGE © Copyright 1994, 2008, 2017 by Minnesota State Bar Association, Minneapolis, Minnesota. (Use only with "Minnesota Standard Residential Purchase Agreement", Minnesota State Bar Association.) This Addendum is a continuation of the PRICE AND TERMS contained in Paragraph 5 of the Purchase Agreement dated 1 by and between , as Seller,2 and , as Buyer,3 for property located at or legally described as: 4 5 6 7 8 9 A. FINANCING CONTINGENCY.10 Notice to Buyer and Seller. Buyer’s mortgage financing is usually the most significant contingency in a Purchase Agreement.11 Of the three choices below, 1., and 2., are legally uncertain since Buyer is not required to present a “Borrower’s Loan Commitment”12 (as defined by Minn. Stat. Section 47.20, Subd. 2(8) and delivered by lender to Buyer in the form and with the content required by13 Minn. Stat. Section 47.206). 14 Pursuant to Minn. Stat. Section 47.206, Subd. 3, the “loan approval” or “loan qualification letter” discussed in 2., below, is not15 enforceable against the lender by the Buyer (as “borrower” under that statute). Such written statements from a lender may be16 withdrawn or may have their terms altered by the lender prior to closing.17 Choice 3., below, has more certainty, but it might also present Buyer with an unforeseen expense. Some lenders charge a fee18 for obtaining a loan commitment. Choice 3., below, might also present Buyer with a limited number of lenders: some lenders19 (typically mortgage brokers) will not offer loan commitments. 20 [Portions of the statutes cited in this Notice are reprinted at the end of this form.]21 22 Buyer's performance of Buyer's obligations under this Purchase Agreement is contingent upon Buyer securing the23 financing referred to in paragraph B. below. [Choose one of the following three choices:]24 25 [__] 1.Contingency Open Until Date of Closing. This contingency is effective until the Date of Closing as stated in the26 Purchase Agreement. If Buyer is unable to secure the financing on or before the Date of Closing, this Purchase27 Agreement is canceled and the earnest money shall be refunded to Buyer. “Securing financing” under this paragraph28 1., means obtaining mortgage financing that is delivered at closing. 29 Buyer may waive this financing contingency prior to the Date of Closing.30 31 [__] 2.Informal, Unenforceable “Loan Approval.” This contingency is effective until [state date (allowing Buyer32 approximately 3 weeks or more to secure financing)] [ the “Loan Approval33 Date”]. “Securing financing” under this paragraph 2., means obtaining a ”loan approval letter,” a “loan qualification34 letter,” or some other form of nonbinding written statement from a lender indicating a willingness to make a loan. If, on35 or before the Loan Approval Date, 36 !Buyer has not delivered to Seller evidence that Buyer has secured the financing, or, 37 !Buyer has delivered such evidence to Seller and Seller has indicated in writing to Buyer that Buyer’s evidence is38 not satisfactory to Seller, 39 then [select either a., or b.]40 [__] a. this Purchase Agreement is canceled and the earnest money shall be refunded to Buyer. 41 [__] b. Seller may cancel this Purchase Agreement pursuant to Minn. Stat. Section 559.217, Subd. 3 (allowing42 Buyer a 15 day right to cure). 43 Buyer may waive this financing contingency on or before the Loan Approval Date.44 45 [__] 3.Formal, Enforceable Loan Commitment. This contingency is effective until [state date (allowing Buyer approximately46 3 weeks or more to secure financing)] [ the “Commitment Date”].47 “Securing financing” under this paragraph 3., means obtaining a loan commitment or loan agreement as defined in48 Minnesota Statutes section 47.20. If, on or before the Commitment Date, Buyer has not delivered a copy of the loan49 commitment to Seller, 50 then [select either a., or b.]51 [__] a. this Purchase Agreement is canceled and the earnest money shall be refunded to Buyer. 52 [__] b. Seller may cancel this Purchase Agreement pursuant to Minn. Stat. Section 559.217, Subd. 3 (allowing53 Buyer a 15 day right to cure). 54 Buyer may waive this financing contingency on or before the Commitment Date.55 56