Is it ethical/ legal for a property seller to be the lender when selling the property

[Kathleen Jones]

My partner and I recently walked a property. In talking with our contractor to schedule a walk thru to get a scope of work, he informed us the property belongs to one of independent HMLs whom he has worked with extensively. We spoke to the property owner and he offered to fund the project. Is this ethical / legal for the seller to be the lender on the sale of their own property? Just not a scenario we have run into yet. TIA.