Short answer: it happens more than lenders admit: credit committees change, a condition can't be met, or the lender's appetite shifts. The key is having a complete, clean package that a second lender can pick up fast.
A real example
An industrial contractor's USDA-guaranteed loan of about $6.75M was days from closing when the bank backed out. We moved the file to a specialist USDA lender using the existing package rather than starting from zero, and it closed.
What to do
- Keep third-party reports (appraisal, environmental, title) in your name or transferable where possible.
- Don't let your broker work with only one lender on complex deals.
- Ask early what could stop closing and clear it first.
Related: USDA loans · SBA 7(a)