Updated about 7 years ago on . Most recent reply
Owner financing question
Hi everyone. Question for anyone who is familiar with owner financing. I am on the brink of closing my first owner financed deal on a SFH in Texas. Does anyone know if I am able to still attain an equity line on this property since I will still be the owner? I'm looking to pull cash out for reinvestment into other projects and repay one of my original investors. Any insight is appreciated.
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@Josh Beller
The information in your post is incomplete. However, I am going to assume that you are selling the property on a contract for deed in which although the buyer has equitable ownership, you retain legal ownership. If this is the case, you would be able to obtain a loan on the property as long as the contract for deed doesn’t prohibit it and you don’t disclose the contract for deed to a lender.
Arguably, not disclosing that you don’t have equitable ownership to a lender would constitute mortgage fraud. Further, in Texas, once the buyers equity in the property reaches 20%, you are required to grant him legal title.
I can think of no other situation in which you sell a property and still “own it”.
- Don Konipol
