Texas · TREC 41-3Texas loan assumption addendum (TREC 41-3)
When a Texas buyer assumes the seller's existing loan, the parties use TREC 41-3. The seller approves the buyer's credit (7 days after the documents), delivers the note, deed of trust and latest loan statement within 7 days after the Effective Date, and either party may terminate if the noteholder refuses consent. The buyer may terminate if the noteholder demands a higher fee or rate than written, or other changes. Unless the seller is released, the seller stays liable on the loan.
How the assumption works
Credit approval (¶A–B)
The same mechanism as in seller financing: credit documents within the days written; late, the seller may terminate and receive the earnest money; delivered, the seller has 7 days after the later of the deadline or delivery to reject the credit.
Loan documents in 7 days (¶C)
Within 7 days after the Effective Date the seller delivers copies of the notes, deeds of trust and the most recent loan statements.
Balance variance (¶C)
A difference in the unpaid balance at closing adjusts the cash or the price; above the amount written, either party may terminate unless the other pays the excess.
Buyer's limits (¶D)
The buyer may terminate if the noteholder requires an assumption fee above the amount written that the seller declines to pay, a rate above the cap written, or any other loan modification.
Consent and liability
Noteholder consent (¶E)
If the noteholder does not consent, either party may terminate – earnest money refunded.
Vendor's lien (¶F)
Unless the seller is released from liability, a vendor's lien and deed of trust to secure assumption are required; it is released when the noteholder's release is delivered.
Escrow account (¶G)
The seller transfers the loan's tax and insurance escrow without deficiency; the buyer reimburses the seller.
Due-on-sale
The note may let the noteholder call the whole loan due on a transfer without consent. The seller stays liable unless released – TREC has a separate Release of Liability Addendum.
What the TC tracks
- Credit documentation deadline and the seller's 7-day approval window.
- Loan documents from the seller within 7 days after the Effective Date.
- The noteholder's assumption package, fee and any rate change – against the caps in ¶D.
- Whether the seller wants a release of liability.
Questions about the Texas loan assumption addendum
Which TREC form is used to assume a loan in Texas?
The Loan Assumption Addendum, TREC No. 41-3.
When must the seller deliver the loan documents?
Within 7 days after the Effective Date: the notes, deeds of trust and the most recent loan statements.
What if the lender refuses the assumption?
If the noteholder fails to consent, either party may terminate and the earnest money is refunded.
Is the seller released when the buyer assumes the loan?
Not automatically – the seller remains liable unless the noteholder releases it.
Can the buyer back out if the assumption fee is higher than expected?
Yes, if it exceeds the amount written in ¶D and the seller declines to pay the excess.
Texas forms
Add the 7-day loan document delivery and the credit approval window as dated tasks on the deal in ClosingCode, with reminders before each one.
Start free trialSource: Texas Real Estate Commission, TREC No. 41-3 Loan Assumption Addendum (11-07-2022, effective February 1, 2023), ¶A–H and notices.
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.