The arrangement can benefit buyers and sellers by extending credit to homebuyers who would not otherwise qualify for a loan. In a contract for deed, the purchase of property is financed by the seller rather than a third-party lender such as a commercial bank or credit union. One such alternative is the contract for deed. Some financial counselors predict that borrowers with limited options may turn to alternative means of purchasing a home.
Because of recent credit tightening, some homebuyers may be less likely to qualify for mortgages than they were just a few years ago.
