Florida Buyer's Guide · Step 6 of 7
Loan Contingency
The loan contingency (Paragraph 8 of the AS IS contract) protects your deposit if you can't get your loan approved. The deadlines matter.
The loan approval period is 30 days after the Effective Date and you must apply within 5 days, unless different numbers are written in.
How it works
- Apply for the loan within the deadline and make a good-faith effort to get approved.
- “Loan approval” includes an appraisal your lender is satisfied with, if the lender requires one.
Before the loan approval period ends, choose one
- Give written notice that your loan is approved, or that you're satisfied you can move forward, or
- Cancel in writing, and your deposit is returned as long as you aren't in default.
If you do nothing
If the period ends with no notice from you, the contract moves forward as if it were a cash purchase. The seller then has a short window (3 days by default) to cancel and return your deposit. Don't let this deadline pass without a decision.
After you give notice of loan approval
Once you've told the seller your loan is approved, if the loan falls through and you don't close, you can lose your deposit. There are limited exceptions, such as a seller default. A low appraisal is not one of them.
Until closing, stay in close touch with your lender, and don't open new credit, change jobs or make large purchases.
Cash buyers
A cash purchase uses Paragraph 8(a) and has no loan contingency.
Need to sell your current home first?
A loan that depends on selling another home doesn't count as approved unless the Sale of Buyer's Property Rider (Rider V) is part of the contract.
This guide is general information about the Florida Realtors/Florida Bar AS IS Residential Contract for Sale and Purchase (ASIS-7x) and the Florida Realtors buyer brokerage forms. It is not legal advice. Day counts shown are the form's defaults and apply only when the blank is left empty; your contract controls. For legal questions, consult a Florida real estate attorney.