What Is a Financing Contingency in a Florida Contract?

Short answer

A financing contingency lets a buyer cancel and get the deposit back if they cannot get loan approval by a set deadline. In the Florida Realtors/Florida Bar (FR/BAR) contracts, Paragraph 8(b) sets a Loan Approval Period of 30 days after the Effective Date if the blank is left empty, and the buyer must apply within 5 days (as of November 2026). The protection only works if the buyer sends written notice before the period ends.

Definition

A contract clause that makes the purchase depend on the buyer getting loan approval. In the FR/BAR forms, Paragraph 8(a) means cash with no financing contingency; Paragraph 8(b) adds the contingency with a Loan Approval Period.

Worked example

Example only: the contract becomes effective March 1 with a $20,000 deposit and the Loan Approval Period blank. The buyer must apply by March 6 (5 days) and the period ends March 31 (30 days). If underwriting is still open on March 29, the buyer has three choices in writing before March 31: confirm approval, terminate and get the $20,000 back, or say they expect approval and continue, which gives up most of the protection.

When your deposit is at risk

Under the FR/BAR Paragraph 8(b), as summarized by Florida Realtors (as of November 2026):

• You terminate in writing before the period ends: the deposit is refunded if you are not in default.
• You send no notice at all: the contract continues as if it were cash (8(a)). The seller then has 3 days to cancel and refund you; if not, you must close without a financing out.
• You confirm approval or say you will proceed, then fail to close: the deposit generally goes to the seller, unless the failure is caused by the seller or by property-related loan conditions. The appraisal value is excluded from those conditions.

A phone call or text to your agent is not notice. It must be by mail, fax, personal delivery or email from you, your attorney or your agent. Your deposit is your earnest money.

Pre-approval is not loan approval

A pre-approval is issued before underwriting. Loan approval under the contract means approval of the loan described in the contract and, if the lender needs one, an appraisal satisfactory to the lender. A conditional approval with open items is a judgment call, so ask your lender in writing what is left before the deadline.

In South Florida

The same 30-day and 5-day defaults appear in both the FR/BAR Standard contract (Rev. 12/24 copy reviewed) and the "AS IS" contract (Rev. 4/17 copy reviewed). Florida Realtors notes that "Financing" in Paragraph 8 means a conventional loan; FHA and VA buyers need the FHA/VA rider. In South Florida condo deals, the condo questionnaire, insurance and special assessments can slow approval, so ask for a 30 to 45 day period and apply on day one. This is general information, not legal advice.