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Description: This Addendum is used when any type of financing for all or part of the purchase price will be provided by a third-party (not the Seller or Buyer).
A seller financing addendum outlines the terms under which the seller of a property agrees to loan money to the buyer in order to purchase their property.
In some cases, the title to the house is kept by the owner until the buyer pays off the loan. It is common for owner-finance deals to be short-term loans with low monthly payments. A typical amortization schedule is 30 years (which keeps monthly payments low) and ends with a balloon payment within five or ten years.
What is the purpose of the Credit Documentation paragraph of the Seller Financing Addendum? This paragraph is the buyer's agreement to deliver documents that show creditworthiness within a certain time period.