Q: My husband and I are building a house with a big new construction company. We put down $10,000 in earnest money when we signed the contract back in June.

The contingency clause in the contract said the earnest money was refundable if we failed to qualify for a mortgage within 30 days of signing the contract. We went with the builder’s in-house lender (to get all the incentives) and were approved.

At the same time, we were in the process of selling our house. But our buyer is having trouble getting his mortgage in order. When we qualified in June, it was for a low-down payment mortgage. We hadn’t yet sold our house, so we couldn’t show that we had enough proceeds for a larger down payment.

We’re supposed to close on our house in the next couple of weeks. The builder’s lender called a few weeks ago to say the mortgage we qualified for originally is no longer available. Apparently, we won’t qualify for a mortgage unless we put a lot more money down.

We won’t have any additional cash available until our house closes, which may not happen in time for our new construction closing. I’m wondering if we can get our earnest money back if we can’t sell our house.

The builder’s lender qualified us, nothing has changed in our circumstances, and now they are un-qualifying us through no fault of ours. Any advice you can give would be very much appreciated.

A: When you say nothing has changed, you probably mean nothing has changed in your life. Unfortunately, a lot has changed in the national and international credit markets. One result of the credit crisis is that a lot of mortgage lenders have stopped financing loans. Another result is that today mortgage lenders are requiring higher credit scores and bigger down payments for loans.

What can you do now? You should immediately contact your attorney who can read through your contract and see if these events would entitle you to back out of the deal.

If not, you should have a frank discussion with the builder so that he understands you will not be able to close on the deal without having a loan in place. In some parts of the country, bigger builders are stepping up to provide financing to buyers so that they can close on their new home. The builder may also be able to work with the lender to arrange alternative financing.

If your builder isn’t willing to help you out, and your contract permits the builder to keep your down payment, then it’s entirely possible you’ll lose your cash. On the other hand, it’s also possible that the home is worth less than what you originally agreed to pay. If that’s the case, it might be a wash down the line when you finally sell your home and buy another one.

One last item to note: in some parts of the country, home builders have gotten into trouble by assisting buyers with the names of specific lenders to use in the purchase of their new construction homes. Some of the builders may have a financial incentive to use these particular lenders and in some cases, attorneys for these buyers have claimed that the buyer should not be held responsible for the changes in the marketplace when the buyer used the lender recommended by the builder and that financing falls through, as in your case.

You might want to do a little searching in your area to see if there are any attorneys that are arguing that issue and work with them to get your money back.

Nov. 12, 2008.