Which type of financing involves a seller helping to finance by taking responsibility for a portion of the buyer’s loan?

The correct answer is the type of financing where the seller assists the buyer by taking responsibility for a portion of the buyer’s loan. This is known as a seller carryback. In this arrangement, the seller provides a loan to the buyer to help cover a part of the purchase price, which enables the buyer to secure the property even if they might not qualify for the full loan amount through traditional financing methods. The seller essentially acts as a lender, creating a second mortgage for the buyer which is often negotiated as part of the transaction, allowing for more flexible financing options.

In the context of real estate transactions, seller carryback financing can be particularly beneficial in situations where the buyer faces challenges in obtaining sufficient financing from banks or other lending institutions. This type of financing can not only facilitate the sale of a property but also potentially lead to tax advantages for the seller, depending on the structure of the agreement.

To contrast with the other options: an assumable mortgage allows a buyer to take over an existing mortgage under its original terms, without necessarily involving seller financing. A conventional mortgage is a standard loan that is not insured or guaranteed by the government, while USDA financing is a specific type of loan aimed at rural property purchases, typically backed by the government. None of