How LGI Homes Uses This Clause
LGI Homes purchase agreements have been documented to include affiliated lender incentive steering provisions. Buyers are strongly steered toward LGI's affiliated lender, often with incentives tied to using that lender exclusively. This limits your ability to shop for competitive rates and may result in less favorable loan terms. This clause has been the subject of litigation, including Hunterbrook Leaked Sales Manual.
This provision typically appears within the purchase agreement alongside other terms that may limit buyer remedies.
LGI 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.
Standard Form Contract
This clause appears in LGI 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 LGI Homes's use of this clause type.
Hunterbrook Leaked Sales Manual
A 261-page internal training document surfaced showing step-by-step tactics designed to pressure buyers into committing on their first visit. Agents were directed to steer all buyers toward the company's affiliated lender. A former sales manager confirmed that steering buyers toward the affiliated lender was effectively mandatory, not optional. The company's cancellation rate reached approximately 35.9% in Q3 2025 \u2014 more than double Lennar's rate during the same period.
State-by-State Enforceability
Enforceability of this clause varies by state. The following reflects LGI 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... |
| 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... |
| Arizona | Likely Enforceable | Arizona permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Nevada | Likely Enforceable | Nevada permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Colorado | Likely Enforceable | Colorado permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Alabama | Likely Enforceable | Alabama 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... |
| Ohio | Likely Enforceable | Ohio permits builders to offer incentives conditioned on using a preferred lender, subject to... |
| Pennsylvania | Uncertain | Pennsylvania permits preferred lender arrangements subject to RESPA requirements, but the... |
| New Jersey | Uncertain | New Jersey permits preferred lender arrangements subject to RESPA requirements, but the New Jersey... |
| Minnesota | Uncertain | Minnesota permits preferred lender arrangements subject to RESPA requirements, but the Minnesota... |
| Oregon | Uncertain | Oregon permits preferred lender arrangements subject to RESPA requirements, but Oregon's Mortgage... |
| Washington | Uncertain | Washington permits preferred lender arrangements subject to RESPA requirements, but the Washington... |
| California | Uncertain | California permits preferred lender arrangements subject to RESPA requirements, but the California... |
| Maryland | Uncertain | Maryland permits preferred lender arrangements subject to RESPA requirements, but Maryland's... |
Related Clauses in LGI Homes Contracts
This clause often works in combination with other provisions in LGI 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 Hunterbrook Leaked Sales Manual case. The Hunterbrook Leaked Sales Manual ruling may be relevant to your situation. If you are buying a LGI 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 LGI Homes contracts that collectively limit buyer remedies. A contract scan can identify all of them.