Owner Finance vs Rent-to-Own Owner-Financed Homes Purchasing a home with owner financing allows buyers to avoid dealing with traditional mortgage lenders and instead borrow money directly from the seller. When to Consider an Owner-Financed Home This option benefits people who may not qualify for a traditional bank loan, because of credit, income, or job history.

A traditional home loan is the most common type of financing in real estate. These loans usually have strict lending requirements, including credit score and income amounts. They also require a sizable down payment, usually 5-20%. Various federal programs exist to help you if you don’t quite meet the bank’s requirements for a conventional loan.