purchase agreement

I received a pre-approval for a FHA loan, for a home in Texas. Then I signed a purchase agreement. After about thirty days the loan people called me and said that I needed to clear up my credit history before approving the loan. I have some charge-offs that they want me to pay in full. If I do that I will not have enough for a down payment or to close on the loan. The loan guy said that he might be able to get me approved for a loan but at a much higher interest rate. I signed the purchased agreement based on the pre-approval. Do still have to buy the house?

[HomeGuru]

What does your purchase contract state?

4. Financing: Within 1 days after the effective date of this contract Buyer shall apply for and make every reasonable effort to obtain financing. Financing will be deemed to have been obtained when the lender has determined that Buyer has satisfied all of lender's financial requirements (those items relating to Buyer's net worth, income and creditworthiness). If financing (including any financed MIP OR Funding Fee) is not obtained within 30 days after the effective date hereof, this contract will terminate and the earnest money will refunded to Buyer. The portion of the Sales Price not payable in cash will be paid as follows:
A. FHA Insured Financing: This contract is subject to approval for Buyer of a Section 203(B) FHA insured loan of not less than $TBD (excluding any financed MIP), amortizable monthly fo not less than 30 years, with interest not to exceed TBD% per annum for the first 30 years of the loan.

[HomeGuru]

No, you do not have to buy.