Addendum

TREC 41-3 — Loan Assumption Addendum

This addendum establishes the terms and conditions for a buyer to assume the seller's existing mortgage loan(s) as part of the purchase price. It defines the buyer's credit documentation requirements, the seller's right to approve or reject the buyer's credit, the specific loan(s) being assumed (fir

Source: TREC
Form Number: 41-3
Category: Addendum
Revised: November 7, 2022

Used For

Residential Sales, Farm & Ranch, Vacant Land

Form Outline

The TREC 41-3 form is organized into the following sections:

  1. Header and Preamble
    Standard header identifying the addendum and linking it to the underlying purchase contract by property address.
  2. Credit Documentation
    Establishes which credit documents the buyer must provide and the delivery deadline. The buyer authorizes credit agencies to release reports to both the seller and the noteholder(s) of the loan(s) being assumed.
  3. Buyer's Credit Approval
    Establishes the seller's right to review and approve or reject the buyer's creditworthiness. Provides two termination scenarios with different earnest money dispositions depending on whether the buyer failed to deliver documents or the seller rejected the credit.
  4. Assumption
    Defines which existing loans the buyer will assume, including the noteholder identity, expected unpaid balances, and monthly payment amounts. Provides a mechanism for handling loan balance variances at closing and requires the seller to deliver loan documents within 7 days of the Effective Date.
  5. Loan Assumption Terms
    Protects the buyer by setting maximum acceptable assumption fees and interest rate increases. If the noteholder's requirements exceed these limits and the seller will not cover the excess, or if the noteholder requires any other loan document modifications, the buyer may terminate with a full earnest money refund.
  6. Consent by Noteholder
    Provides a mutual termination right if the noteholder (lender) refuses to consent to the loan assumption. This is critical because many loans have due-on-sale clauses requiring lender approval.
  7. Seller's Liens
    Protects the seller who remains liable on the assumed note by requiring a vendor's lien and deed of trust to secure assumption. This lien is automatically released when the noteholder provides a release of the seller's liability.
  8. Tax and Insurance Escrow
    Addresses the transfer of existing escrow accounts held by the noteholder. The seller must ensure there is no deficiency in the escrow account, and the buyer reimburses the seller for the escrow balance being transferred.
  9. Authorization to Release Information
    Provides mutual authorization for lenders to share assumption status information with both parties and their representatives. Also authorizes disclosure of closing documents to the brokers and agents listed in the Broker Information section of the contract.
  10. Notices (Buyer, Seller, and Due on Sale)
    Contains three critical warnings: the buyer should review loan documents before signing, the seller remains liable unless released, and due-on-sale clauses may allow the noteholder to accelerate the loan if consent is not given.

How RaiderX Agents Use This Form

When you upload a signed TREC 41-3 to a deal in RaiderX's Deal Manager, it reads the form's key dates and terms and automatically builds out your deadlines, contingencies, and tasks — so nothing slips through the cracks between contract and closing. Forms with a fill map also support e-signature directly inside RaiderX, so you can send this document for signature without leaving the platform.

See Deal Manager in Action
Automatic deadlines and contingency tracking for every Texas contract form.
Apply Now

Ready to Keep 100%?

Join Texas agents who use RaiderX's Deal Manager to stay ahead of every deadline — built around forms like this one.

Apply NowBrowse All Forms