The FHA Amendatory Clause and Real Estate Certification is a one-page addendum your lender provides for any FHA-insured home purchase. To complete it, fill in the property address, FHA case number, borrower and seller names, and the appraised value figure, then have the buyer, seller, and both agents sign and date the appropriate lines before closing.
What You Are Actually Signing
The page has two halves, and each does a different job.
The top half is the amendatory clause itself. HUD Handbook 4000.1 requires this language whenever the buyer has not already received a written statement of appraised value (form HUD-92800.5B) before signing the sales contract.1U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook It says the buyer is not locked into the purchase and will not lose earnest money if the appraisal comes back below a specified dollar amount, which is filled in on the form. The buyer can always proceed with the purchase anyway. The clause also states that HUD does not warrant the home’s value or condition; the appraisal sets the maximum mortgage HUD will insure, not whether the property is worth its price to you.2U.S. Department of Housing and Urban Development. FHA Amendatory Clause and Real Estate Certification
Federal regulation reinforces this from the seller’s side. Under 24 CFR 203.15, an FHA mortgage insurance application must include the seller’s or builder’s agreement to deliver a written statement of appraised value to the buyer before closing.3eCFR. 24 CFR 203.15 – Certification of Appraisal Amount
The bottom half is the Real Estate Certification. By signing it, the buyer, seller, and their agents certify that the sales contract reflects the complete agreement between the parties and that any additional agreements are disclosed and attached.2U.S. Department of Housing and Urban Development. FHA Amendatory Clause and Real Estate Certification Hidden credits, undisclosed rebates, and side agreements can inflate the effective purchase price and expose HUD to a larger insured loan than the property justifies. The certification makes every party personally accountable for the honesty of the deal’s financial terms.
Filling In the Fields
Your lender usually delivers the form with your loan details already populated. If you get a blank version, here is what each field needs:
- Property address. The full street address of the home, matching the sales contract exactly.
- FHA case number. A number HUD assigns to your specific loan application. Your lender generates and provides this.
- Appraised value amount. A blank line inside the clause text where the dollar figure goes. This is typically filled in after the appraisal is completed, or left for the lender to insert. Whatever amount appears here sets the threshold: if the appraisal comes in below this number, you can walk away.
- Borrower names. The full legal names of everyone on the mortgage application.
- Seller names. The full legal names of every seller on the deed.
Names should be spelled consistently across the amendatory clause, the sales contract, and the loan application. Mismatches can stall underwriting.
Who Signs Which Half
The two halves have different signature requirements. The amendatory clause at the top needs signatures from the buyer and seller. The real estate certification at the bottom needs signatures from the buyer, seller, the buying agent or broker, and the selling agent or broker. Every signature line is dated.
Timing matters. The form is typically signed at the same time as the purchase contract or shortly after. If your sales contract is already executed and the amendatory clause was not included, sign it as an amendment before closing. Agents do not need to write in their license numbers on this form. Signatures and dates are enough.
What the Appraised Value Figure Triggers
Once the appraisal is in and the value amount is written into the clause, the number does real work. If the FHA appraiser sets the property value below the contract price, you have three basic options:2U.S. Department of Housing and Urban Development. FHA Amendatory Clause and Real Estate Certification
- Cancel the contract and receive a full refund of your earnest money. The clause explicitly prohibits any penalty for exercising this right.
- Renegotiate the price with the seller, or negotiate a larger seller contribution toward closing costs. FHA allows seller contributions of up to six percent of the sale price.
- Pay the difference in cash. FHA will insure a loan based on whichever is lower: the appraised value or the purchase price.
If you cancel, submit written notice to the seller or the seller’s agent. The deadline for that notice comes from the appraisal contingency in your purchase contract, not from the amendatory clause itself. Check that date carefully.
When the Form Is Not Required
Most FHA-insured purchases of a primary residence need the amendatory clause and real estate certification, unless the buyer already received the appraised value statement before signing the contract. The requirement runs through HUD Handbook 4000.1 and covers standard FHA purchase mortgages, FHA streamline transactions, and most other FHA-insured loan products.1U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook
Several categories of sales are exempt:4U.S. Department of Housing and Urban Development. 4155.1 REV-5 – Documentation and Other Processing Requirements
- HUD REO sales, where HUD itself is selling a foreclosed property.
- 203(k) rehabilitation mortgages, which follow a separate valuation process.
- Sales by Fannie Mae, Freddie Mac, VA, Rural Housing Services, and other federal, state, or local government agencies.
- Lenders disposing of their own REO assets.
- Foreclosure sales and purchases by non-owner-occupants such as nonprofit agencies.
Conventional loans do not use this form. Buyers on conventional mortgages rely on private appraisal contingencies in their purchase contracts instead.
What the Certification Commits You To
Signing the bottom half is a personal attestation, not a formality. Under 18 U.S.C. ยง 1010, anyone who knowingly makes a false statement to influence HUD faces a fine, up to two years in federal prison, or both.5Office of the Law Revision Counsel. 18 USC 1010 – Department of Housing and Urban Development and Federal Housing Administration Transactions HUD can also pursue civil money penalties under 24 CFR Part 30, and state real estate commissions can act against agents involved in fraudulent transactions, up to and including license revocation. If there is any side agreement, credit, or rebate between buyer and seller, disclose it and attach it to the contract before anyone signs.