Seller Carry-Back

[Rivers Plowden]

I have heard of others using a seller financed carry-back as a 2nd position to finance a purchase.  However, I am being told this is not possible by the bank.  Is it not possible to say, on a purchase price of $100,000, take a conventional for 60% ($60,000), and then rather than a cash down payment, have the seller carry back a note for the remaining 40% ($40,000)? I understand this is a 100% financing situation, but I just read the other day someone using this strategy.  Do I just need to find the right bank?

Any insight is greatly appreciated.

[Tom S.]

@Rivers Plowden  For most conventional lenders, no, this will not work.  I've had some success doing it with commercial loans, where the bank will hold it in house.  That said, I still had to have the down payment first, closed the deal, then executed the seller finance 2nd mortgage which essentially reimbursed me.  Good credit and approval from the bank were all required.  This was a few years ago now but call around to your small local banks.

Hope that helps!

- Tom