2026 Financing Form Changes: Protecting Your Clients Rights and Understanding Their Responsibilities

The 2026 Georgia financing forms include substantive changes that affect how both sides handle financing and financing failure. These are not cosmetic edits. I have also included best practices and reminders for portions that did not change, but are not often fully understood.

Two areas deserve immediate attention:

1. The revised F401 No Financing Contingency Exhibit

2. Substantive changes across the standard financing contingency exhibits

F401 No Financing Contingency Exhibit:

Condo / Master Insurance Approval Is Now an Express Option

The F401 now allows the parties to check IS or IS NOT contingent upon:

• Condominium approval, and

• Master insurance policy approval

This contingency:

• Applies only if a lender cannot make the loan due to project/insurance issues

• Requires a lender letter stating inability to obtain Project Approval

• Must be delivered within 7 days of termination

• Survives through Closing

This option did not previously exist as a contingency in F401. This penalized the Buyer who may well be the most qualified for reasons that had nothing to do with their ability to qualify for a loan.

Best Use as a Buyer's Agent:

Buyers should almost always check IS. Sellers may accept it without countering because they do not expect the issue to arise or did not even notice there is a checkbox in the middle of the form. Why give away a Buyer right if you do not have to. What is the harm, even if you think it does not apply?

The Buyer must provide the Seller with a letter from the lender stating the inability to get "Project Approval" within 7 days of terminating just like loan denial letters. As with the other financing forms, the right to terminate for these issues lasts until Closing.

Buyer's Agents need to realize and, if applicable, explain to their client that this does not protect Buyers who are truly paying cash. It only protects them if a lender cannot make the loan because of condo and master insurance issues. Cash Buyers need to use their Due Diligence period to satisfy themselves that the development and insurance are in good shape for their ownership and consider how they affect their ability to sell later on.

Best Use as a Seller's Agent:

You could counter to remove the contingency, but the better plan is to investigate and find out about potential issues during the listing. I personally purchased a property where the association was not contributing sufficient funds to reserves and there was an under-insurance issue. The reserve issue was resolved (after much stress for the Buyer, Seller, Agents and Lender) prior to Closing, but the Seller ended up agreeing to a price reduction and we delayed the Closing to switch to a cash purchase. If all of this had been open information at the time we were competing for the property, we may have paid the original asking price with the issues in mind and it would have closed on time.

💡 Other Practical F401 Tips:

Buyer's Agent Tips

• Remember that the Buyer who checks the All Cash option has to provide actual proof of funds. What that has to be is specified in the form. Make sure the Buyer will be able to produce the required documents. If they cannot and the Buyer defaults on this obligation, the Seller can terminate and take the Buyer's Earnest Money under the process set out in the Seller's Right to Terminate section of this Exhibit.

• Remember that neither option gives the Buyer the ability to delay if the lender is not ready. The borrowing Buyer and lender need to understand the expectation that they will get their stuff done and close on time.

• The Buyer can get a loan regardless of which box they check, but they have to also have sufficient funds to close as a cash buyer if they check the All Cash box because of the Verification of Funds requirements.

• This is not the right form to use when the cash is coming from the sale of a property with modification.

  Special Stip from www.SmartStips.com to use in the Purchase and Sale Agreement but amends the exhibit: (The estimate could be a prelim settlement statement or some other Seller Net calculation.)

  Buyer and Seller acknowledge that a portion of the funds for Closing will come from the sale or lease of property.  The Buyer will provide to Seller the Required Information (as defined in the No Financing Contingency Exhibit) for the portion of funds that is currently available to the Buyer within ________ days of the Binding Agreement Date.  The Buyer will provide to Seller an estimated settlement statement for the sale of ________________________________ prepared by __________________________ within ______ days of the Binding Agreement Date.  The total funds shown is the Required Information.  

Seller's Agent Tips

• Set a reminder for receiving Verification of Funds.

• Make sure the documents sent for Verification of Funds are truly that - not a hard money pre-qualification letter, not funds that are in an account that belongs to someone other than the Buyer, etc.

• If Verification of Funds is not received the Seller must send Notice (in writing, signed by the Seller, sent to an email address in the contract for the delivery of Notice) to the Buyer and the Buyer gets 3 days to cure the default. If the Buyer does not cure, they only have 7 days to decide to terminate or their right to do so is waived. If they do terminate, they can claim the Buyer's Earnest Money.

Substantive Financing Contingency Changes

These changes apply across all major financing exhibits:

• Conventional (F404)

• FHA (F407)

• VA (F410)

• USDA-RD (F413)

Loan Denial Letters Must State the Basis of Denial

A simple “Buyer was denied” letter is no longer sufficient.

Under the revised forms, the denial letter must state the basis for the denial.

I cannot tell you how many denial letters I have reviewed that fail to do this. I am sure a lot of Brokers out there, many of whom I have commiserated with, can tell you the same.

This change significantly reduces abuse of the financing contingency and gives sellers more clarity about whether the denial is legitimate.

If I were adding anything to this, I would like it to go further to state that the Denial Letter will state ALL of the reasons that form the basis of the denial. I have seen too many times where the Seller has rejected the Denial Letter and the Buyer send another denial letter. If that one does not work, they send a 3rd denial letter.

Tips for Both Agents:

• Read the Denial Letter before proceeding.

• Re-read the contract requirements before forwarding the Denial Letter to other side or responding to receipt of the Denial Letter.

• Discuss the best course of action with your Broker BEFORE taking action.

Evidence of Ability to Close

The delivery time and time to cure default when the Seller requests Evidence of Ability to Close was reduced from 10 total days (7 and 3) to 7 total days (5 and 2).  That is the only change.

Tips for Both Agents:

This section is something of a misnomer. It is not the Buyer proving they can close—it is the Buyer advising the Seller what is required in order to close.

The requirements of Evidence are listed in the contingencies. The Seller does not have to like or accept the list of conditions necessary to close. Getting the list fulfills the requirement.

The Seller's Right to Terminate paragraph gives the Seller the right to send Notice of default if the Evidence is not received, gives the Buyer the right to cure the default, and gives the Seller the right to Terminate if the Buyer does not cure. Since this is a Buyer default, the Seller would have the right to the Earnest Money.

⚠️ Bottom Line for Agents and Brokers

• There a deadlines.

• There are requirements.

• Who will get the Earnest Money is affected by understanding and enforcing these rights and obligations.