affordable housing - owner financing
From: Susan Coberly (
Date: Fri, 9 Sep 2016 09:57:06 -0700 (PDT)
x-ref. digest 152, Issue 10, message 4

self- financing success stories.  in reference to Katie Hnery's and Sharon
Villine's posts.

OK some of there are also "in the past" - and this strategy may be
impossible or downright difficult (I believe most lenders frown on it) if
one does not own one's home free and clear.

My maternal grandmother sold her home in San Mateo in the 1929-1931 period
after my grandfather died, I am sure the home was free and clear - they had
saved to build it themselves. She self-financed. She and then my mother
continued to receive mortgage payments into the early 60's until the loan
was paid in full. The buyer did not default. It was always a
possibility....I do not know whether the buyer was ever late in paying.

My mother sold her home on this kind of contract, herself, when she had to
move for a job in around 1971, and that buyer did not default. I think that
mom's home was not fully paid for at the time; mom still had to pay
her mortgage, and the new owner had to pay my mom. The new owner did not
assume mom's mortgage. This was called a "land contract" in California, at
that time.

My husband and I bought a home (a 400 square foot cabin, really) from the
owner in the late 1970's. They owned it outright and self-financed. (It
probably would not have qualified for a mortgage otherwise....) We had to
move and had a tenant for a few years.  When she decided she needed a
larger place, she gave us a long advance notice. We told the tenant that
since we now lived 150 miles away, we felt we needed to sell it rather than
re-rent, and we would need to put it up for sale.  We asked whether she
wanted to buy it from us. (We had long told her that if we decided to sell
we would ask her first.)  Our tenant told us she didn't want to buy it - it
was ok to list it for sale.  So we made a new lease together which would
give her some breathing room and listed it. Our agent talked to our tenant.
She ended up talking her through the process of buying!  We paid off the
loan to the original seller's son, in escrow; our tenant did get bank
financing because she wanted to add onto the cabin.

I agree this is a good option for people to think about.

I am not sure how many people own their real estate outright now,
especially cohousing homes. I sure don't own my own cohousing home
outright. However, I own another one here outright and my wonderful tenants
have the right to buy it from me, should I decide to sell, or should my
heirs have to sell.

Susan Coberly (LaQuerencia aka Fresno Cohousing), Fresno, California
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