Conventional Financing Contingency Loan Denial Letters

​If a buyer is denied a loan, based on the loan described in the contingency, the buyer must 1) notify the Seller within the contingency time period AND must 2) provide the Seller with a Loan Denial Letter within seven (7) days from the date of notice. 
 
A Loan Denial Letter must be for the Loan(s) described in the Finance Contingency. A buyer may also apply for different conventional loans, however, the denial of such other loans is not be a basis for a buyer to terminate.  If there was an approved lender, the letter must be from the Approved Lender.
 
The Loan Denial Letter may be provided to Seller after the Financing Contingency Period has ended, if the seven (7) day period to provide the Loan Denial Letter falls outside of the Financing Contingency Period.  The reason for the additional 7-day period to produce the Loan Denial Letter is because lenders may not be timely.  It may take days for the lender to produce the letter.  If, however, the lender does not produce the letter within the 7-day period, the finance contingency is completed and cannot be relied on to terminate.  In effect, the sale becomes a “no financing” sale and the buyer’s earnest money is at risk.

If a buyer is denied a loan, based on the loan described in the contingency, the buyer must 1) notify the Seller within the contingency time period AND must 2) provide the Seller with a Loan Denial Letter within seven (7) days from the date of notice. 
 
A Loan Denial Letter must be for the Loan(s) described in the Finance Contingency. A buyer may also apply for different conventional loans, however, the denial of such other loans is not be a basis for a buyer to terminate.  If there was an approved lender, the letter must be from the Approved Lender.
 
The Loan Denial Letter may be provided to Seller after the Financing Contingency Period has ended, if the seven (7) day period to provide the Loan Denial Letter falls outside of the Financing Contingency Period.  The reason for the additional 7-day period to produce the Loan Denial Letter is because lenders may not be timely.  It may take days for the lender to produce the letter.  If, however, the lender does not produce the letter within the 7-day period, the finance contingency is completed and cannot be relied on to terminate.  In effect, the sale becomes a “no financing” sale and the buyer’s earnest money is at risk.