What Owner Financing Actually Is
Owner financing — also called seller financing, a land contract, or a contract for deed — means the seller acts as the lender. In Washington, the same instrument is called a Real Estate Contract. Different names, same idea.
We own the houses we sell. So when you buy one from us on owner financing, there’s no third party to satisfy. We set the terms with you directly, in writing, and you make your payments to us instead of to a bank.
Here’s the part most sites gloss over, and you should understand it before you sign anything:
At closing, you take possession and equitable title. You live in the home. You’re responsible for it. Any appreciation belongs to you, and every payment builds your position in the property.
We retain legal title until the balance is paid in full. When you complete the payments — or refinance and pay off the balance early — legal title transfers to you and the contract is satisfied.
That structure is what allows us to sell to buyers a bank would decline. It’s also why you should have your own attorney read the contract before you sign. We recommend that on every transaction, and we’ll give you the documents with enough time to do it.
How It Works
1. Get on the buyer list. Fill out the form or call. We’ll ask about household income, what you have available for a down payment, and your timeline. Two minutes.
2. We review your situation. We verify income and ability to pay. We’re not pulling a score and rejecting you over it — we’re confirming the payment fits your actual budget. If it doesn’t, we’ll tell you what would.
3. You tour available homes. We’ll show you what’s in inventory that matches your budget and area.
4. We agree on terms in writing. Purchase price, down payment, interest rate, monthly payment, and term length — all documented before anything is signed. Nothing is verbal.
5. Attorney review. Take the contract to your own attorney. We want you to. A buyer who understands what they signed is a buyer who stays in the home.
6. Close and move in. You get the keys and start building toward full ownership.
What You Need to Qualify
We look at four things:
A down payment. This is the main one. Owner financing requires meaningful money down — it’s what makes the deal work without a bank. Amounts vary by property and by which structure you qualify for. Think at least 10% down, but often 20% or more. See Two Ways We Structure It below.
Verifiable income. Bank statements, 1099s, contracts, deposits — we work with how self-employed people actually get paid. We don’t require two years of tax returns.
A payment that fits your budget. We’ll look at your total housing cost against your income. If it’s too tight, that’s a bad deal for both of us.
No active bankruptcy. A discharged bankruptcy is fine — that’s a large share of our buyers. An open, undischarged case is a complication we’d need to talk through.
What we don’t require: a minimum credit score, two years of W-2 employment, or bank approval of any kind.
Two Ways We Structure It
Not every owner-financed deal looks the same. Which structure you get depends largely on how much you bring to closing.
Real Estate Contract (our standard)
Also called a contract for deed or land contract. This is how most of our transactions are written.
- You take possession and equitable title at closing
- We hold legal title until the balance is paid
- Lower down payment requirement
- Legal title transfers to you at payoff or refinance
Note and Deed of Trust (higher down payment)
For buyers bringing a larger down payment, we can sometimes write the deal as a promissory note secured by a deed of trust.
- You take legal title at closing — the deed is in your name from day one
- We hold a lien against the property, the same way a bank would
- Requires a substantially larger down payment – Usually at least 20%
- Stronger position for you, which is why the cash requirement is higher
If you’re sitting on more cash than you planned to use, tell us. A larger down payment may move you into a deed of trust structure and put the deed in your name at closing. That’s worth asking about before you assume a smaller down payment is the better move.
Owner Financing vs. a Conventional Mortgage
| Owner Financing | Conventional Mortgage | |
|---|---|---|
| Who approves you | We do | An underwriter |
| Credit-score minimum | None | Typically 620+ |
| Self-employed income | Bank statements, 1099s, contracts | Two years of tax returns |
| Time from offer to keys | Days to weeks | 30–45 days |
| Bankruptcy waiting period | None | 2–4 years, depending on chapter and loan type |
| Foreclosure waiting period | None | 3–7 years, depending on loan type |
| Interest rate | Typically above market | Market rate |
| Closing costs | Lower | Lender fees, origination, points |
| Legal title at closing | Held by seller until payoff under a real estate contract; transfers to buyer under a deed of trust | Transfers to buyer |
We’ll be straight with you about the tradeoff: owner financing costs more than a bank loan. The rate is higher because we’re carrying the risk a bank won’t. If you can qualify for a conventional mortgage, take the mortgage — it’s the cheaper product, and we’ll refer you to our retail brokerage to help you find a home that way.
Owner financing is for people who can’t get that loan today. It’s a bridge, not a bargain.
Owner Financing or Lease Purchase?
We offer both. The short version:
Owner financing — you take possession and equitable title now, and you need a real down payment. Best if you have cash available and documentable income.
Lease purchase — you lease with a contractual right to purchase at a locked price, typically within three years. Lower upfront cash. Best if you need time to build a down payment or season your income.
Compare all three paths side by side → · Learn about lease purchase →
Who This Works For
Self-employed and 1099 earners. Contractors, tradespeople, gig workers, business owners, commission earners. Your income is real; it just doesn’t fit the underwriting template.
Buyers past a bankruptcy or foreclosure. Conventional lenders impose mandatory waiting periods of two to seven years. We look at where you are today, not what happened in 2022.
Buyers coming out of a divorce. A split can wreck a credit file and a balance sheet at the same time, even when your income never changed.
Thin or new credit files. Recent immigrants, younger buyers, and people who’ve lived debt-free and therefore have nothing for a bureau to score.
Investors. Faster closings and fewer hoops than institutional financing.
Your Responsibilities as an Owner-Financed Buyer
We put this on the page because too many companies bury it.
Under owner financing you’re the one living in and responsible for the home. That generally means property taxes, insurance, maintenance, and repairs are yours. If the water heater fails in year two, that’s your water heater.
You also need to make payments on time. Default on an owner-financed contract has real consequences, and depending on your state and your contract those may include forfeiture of the property and what you’ve paid into it. Your specific remedies and protections are spelled out in your agreement and vary by state.
None of that should scare you off — it’s the same responsibility any homeowner carries. But you should walk in with clear eyes, and you should have an attorney confirm exactly what your contract says on default before you sign it.
Refinancing Out Later
Many of our buyers refinance into a conventional mortgage once their credit and income history support it. Nothing in our agreements prevents that.
A stretch of on-time payments, a seasoned business, and a rebuilt credit file can put you in position to pay off the balance with a bank loan at a lower rate. That’s a good outcome, and we’re not going to stand in the way of it.
Where We Offer Owner Financing
Headquartered in Lacey, Washington, serving buyers in:
Washington — Olympia, Lacey, Tumwater, Centralia, and surrounding Thurston and Lewis County communities
Arizona · Idaho · Indiana · Missouri · Montana · Ohio
Inventory varies by market. Terms and legal structure vary by state.
Common Questions
Is owner financing legal? Yes. Seller financing is a long-established, legal way to transfer real estate. It’s regulated — at the federal level and by individual states — and we structure our transactions to comply. We encourage independent attorney review on every deal.
What interest rate should I expect? Higher than a bank rate, because we’re taking on risk a bank won’t. [INSERT RANGE OR REMOVE] Call for specifics on a given property.
Can I sell the home before it’s paid off? This depends on your contract. Talk to us about your situation before you list anything.
What happens if I miss a payment? Talk to us early — a call before you miss beats a call after. Your contract sets out the remedies, and those vary by state. This is exactly the kind of clause your attorney should walk you through.
What’s a Real Estate Contract in Washington? It’s Washington’s term for what other states call a contract for deed or land contract. You take possession and equitable title at closing and we hold legal title until the balance is paid off. It’s a long-established instrument in Washington real estate with its own body of state law governing it.
Can I get the deed in my name at closing? Sometimes — with a larger down payment we can structure the deal as a note and deed of trust, which puts legal title in your name immediately and gives us a lien instead. Ask us what down payment that would take on the property you’re interested in.
How is this different from rent to own? With rent to own you’re a tenant with an option. With owner financing you’re a buyer in possession with equitable title, building toward outright ownership. Full comparison here →
Ready to See What’s Available?
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Call 360-743-3330 · EZ Home Path, a Garrison Property Solutions company