Seller financing, also called owner financing, is a deal where the seller extends credit to the buyer directly. Instead of the buyer bringing a bank loan, the seller accepts a down payment and a promissory note, and the buyer makes installment payments over time. Title may transfer at closing with the seller holding a lien, or be held until the balance is paid, depending on the structure and the state.
It can help buyers who do not fit conventional lending, and it can give sellers a steady income stream plus, potentially, spread-out tax treatment on the gain through installment-sale rules. But it carries legal and regulatory weight: promissory-note terms, usury limits, and consumer-lending rules can all apply, and the details vary by state and by whether the property is owner-occupied. Both sides should use counsel and a tax professional; this is general education, not legal or tax advice.
This is general educational information, not legal or tax advice. Rules vary by state and locality and change over time — check your local law and confirm specifics with a qualified professional.