Buy with your VA benefit
Write the offer with VA protections understood
The VA escape clause, and how it differs from other contingencies.
6 minute read
The VA escape clause
- If the contract is signed before VA's Notice of Value, it must include the VA escape clause. The lender makes sure it is there before closing.
- If VA's reasonable value comes in below the price, you can renegotiate, proceed by covering the difference with your own funds, or walk away without losing your earnest money.
Source: VA Escape Clause; Buying a home with a VA-backed loan
What it does not do
- The clause only applies when value is below the contract price. Other exits, such as an inspection problem, are separate contingencies.
- Builder upgrade deposits are not earnest money and are not covered. Contract wording and state rules belong with your agent's broker or an attorney.
Source: VA Escape Clause; Buying a home with a VA-backed loan
Sources
Official material this lesson draws on. Vanguard's explanation is educational; current official requirements govern.