How Beazer Homes Uses This Clause
Beazer Homes purchase agreements have been documented to include affiliated lender incentive steering provisions. The builder may condition closing incentives, rate buy-downs, or design credits on the buyer using the builder's preferred or affiliated lender. Given Beazer's documented history of mortgage fraud through Beazer Mortgage Corp., buyers should independently verify all loan terms. This clause has been the subject of litigation, including United States v. Beazer Homes USA, Inc. (False Claims Act).
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies. Because Beazer Homes operates across multiple states, the enforceability and practical impact of this clause varies depending on where the home is located.
Beazer Homes's scale means contract templates are largely standardized across its operations. A clause identified in one market's contract is likely present in other markets' contracts, though local addenda may modify the terms.
Builder-Specific Details
Combined with Deposit Forfeiture
Incentives tied to using the preferred lender may be lost if the buyer switches lenders, and the deposit terms may reflect this.
Standardized Across Markets
Beazer Homes's scale means contract templates are largely standardized across its operations. This clause identified in one state's contract is likely present in other states' contracts, though local addenda may modify the terms.
Standard Form Contract
This clause appears in Beazer Homes's standard purchase agreement, which is generally presented on a take-it-or-leave-it basis. Buyers typically have limited ability to negotiate individual terms, though making the request in writing is still advisable.
Legal History
The following cases involve Beazer Homes's use of this clause type.
United States v. Beazer Homes USA, Inc. (False Claims Act)
Beazer Homes and Beazer Mortgage Corp. agreed to pay $5 million plus contingent payments of up to $48 million to resolve False Claims Act allegations. The DOJ alleged Beazer Mortgage originated fraudulent FHA-insured mortgages by charging discount points without reducing interest rates, funding improper down payment gifts through charities to inflate home prices, and concealing branches involved in fraud from the FHA. A Deferred Prosecution Agreement provided for restitution to homeowner victims. Source: DOJ press release; FBI Charlotte field office.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects Beazer Homes's operating states.
| State | Status | Note |
|---|---|---|
| Texas | Likely Enforceable | Texas generally permits builders to offer incentives conditioned on using a preferred lender,... |
| Florida | Likely Enforceable | Florida permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Arizona | Likely Enforceable | Arizona permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| California | Uncertain | California permits preferred lender arrangements subject to RESPA requirements, but the California... |
| Georgia | Likely Enforceable | Georgia permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| North Carolina | Likely Enforceable | North Carolina permits builders to offer incentives conditioned on using a preferred lender, subject... |
| South Carolina | Likely Enforceable | South Carolina permits builders to offer incentives conditioned on using a preferred lender, subject... |
| Indiana | Likely Enforceable | Indiana permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Tennessee | Likely Enforceable | Tennessee permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Virginia | Likely Enforceable | Virginia permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Maryland | Uncertain | Maryland permits preferred lender arrangements subject to RESPA requirements, but Maryland's... |
| Nevada | Likely Enforceable | Nevada permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Delaware | Likely Enforceable | Delaware permits builders to offer incentives conditioned on using a preferred lender, subject to... |
Related Clauses in Beazer Homes Contracts
This clause often works in combination with other provisions in Beazer Homes's purchase agreements.
Incentives tied to using the preferred lender may be lost if the buyer switches lenders, and the deposit terms may reflect this.
The affiliated lender provides the suppressed payment estimates, creating a direct connection between these clauses.
What Buyers Can Do
- Compare rates with independent lenders. The builder's affiliated lender may offer closing cost credits or other incentives, but the overall loan terms may not be the most competitive available.
- Calculate the true cost of lender incentives. A closing cost credit of several thousand dollars may be offset by a higher interest rate over the life of the loan. Run the numbers for your specific situation.
- Review the United States case. The United States v. Beazer Homes USA, Inc. (False Claims Act) ruling may be relevant to your situation. If you are buying a Beazer Homes home in a state with similar legal protections, this precedent could affect the enforceability of this clause.
- Have the full contract scanned before signing. This clause is often one of several interconnected provisions in Beazer Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.