How to Offer Seller Financing in Texas (the Right Way)

What does "offer seller financing in Texas" actually mean?

Offering seller financing means you carry the buyer's loan instead of cashing out through a bank. The buyer takes title, you hold a Texas mortgage note secured by the property, and the buyer pays you over a set term. Carrying the note makes you the lender of record, with specific recordkeeping and reporting duties under Texas and federal law. Those duties apply at every portfolio size.

What does the industry commonly do when structuring a seller-financed note?

These are published market norms — not advice, and not a recommendation for your deal. Roughly 20% down, about 10% interest, and a 15-year fully-amortizing term — the balance pays to zero over the life of the loan — originated by a licensed RMLO. Your numbers depend on the property, the buyer, and current rates; the 30-year fixed has run ~6.5% through 2025–26 (Freddie Mac PMMS). Route the specifics of your own deal to a licensed RMLO or an attorney, who handles compliant origination, document generation, and borrower qualification, and can establish escrow at origination with reserves collected upfront.

Who is allowed to originate an owner-financed loan in Texas?

Owner-financed residential origination must run through a licensed RMLO. Origination is the regulated front end of a seller-financed deal: qualifying the buyer, drafting the note and deed of trust, and meeting disclosure requirements. Moat is a licensed Texas mortgage servicer, bonded, NMLS 1419346, verifiable on the NMLS registry. It is a servicer, not an originator; origination requires a Texas-licensed RMLO. See our Texas RMLO requirements page for the full framework.

What happens after the note is written?

After origination, the note has to be serviced for the life of the loan. Servicing is collecting and posting each payment, sending the borrower IRS Form 1098 each year, keeping accurate records, and — if the loan escrows — administering property taxes and insurance. A missed notice or a misposted payment is the lender's problem, not the borrower's. You can perform this work yourself, or move the note to a licensed Texas servicer who does it under the applicable statutes. See Texas note servicing pricing for the full fee schedule.

What happens if the borrower stops paying?

Texas default and non-judicial foreclosure are governed by Tex. Property Code §51.002, and the notice work has to be exact. A defective notice can restart the foreclosure clock — getting it right is routine servicing work. The full regulatory map for owner financing sits on our Texas seller finance regulations page.