Addendum

TXR 1920 — Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement

This addendum addresses two related issues that arise when a buyer assumes the seller's existing mortgage loan: (A) the release of the seller's liability on the assumed loan from the lender (conventional, VA, or FHA), and (B) the restoration of the seller's VA loan entitlement if the assumed loan is

Source: TXR
Form Number: 1920
Category: Addendum
Revised: December 5, 2011

Used For

Residential Sales, Farm & Ranch

Form Outline

The TXR 1920 form is organized into the following sections:

  1. Form Header and Property Identification
    Identifies the form as the loan assumption release/VA entitlement addendum and links it to the specific contract and property.
  2. Release of Seller's Liability on Loan to Be Assumed
    Establishes a deadline for both parties to apply for release of the seller's liability on the assumed loan (conventional, VA, or FHA). The parties must choose whether failure to obtain release by closing terminates the contract or allows closing to proceed anyway.
  3. Restoration of Seller's Entitlement for VA Loan
    Establishes a deadline for both parties to apply for restoration of the seller's VA loan entitlement. Includes a critical notice that restoration requires the buyer to be a qualified veteran with sufficient unused entitlement. Parties must choose what happens if restoration is not approved by closing.
  4. Cost Allocation and Deed Requirements
    Allocates the costs of obtaining the release of liability and VA entitlement restoration to the seller. Requires the seller's deed to include any loan assumption clauses mandated by FHA, VA, or the lender.
  5. Execution by Buyer and Seller
    Provides signature lines for all buyers and sellers to execute the addendum.

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