Owner (Seller) Financing Addendum

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The owner financing addendum is a document that can provide supplementary terms for a sale that involves the seller supplying the buyer with the necessary funds to purchase the home, i.e., a loan. Although most buyers obtain financing from local mortgage lenders, sometimes sellers offer to furnish the needed money in order to reduce the amount of time it will take to close, get a return on their investment (from the interest rate), and receive certain tax benefits. This is also advantageous to any buyers who seek less stringent qualification requirements, flexible down payments, and fewer closing costs. Every facet of the loan must be recorded within the form, such as the names and addresses of the parties involved, the effective date of the contract, type of loan (amortized, interest-only, balloon, adjustable-rate), etc. After the completion of the document, it must be signed in the appropriate areas and accompanied by a promissory note that will be submitted into the public record. (Buyers who prefer to acquire their financing from a bank should alternatively implement the Third (3rd) Party Financing Addendum.)