Instrument anatomy
What an owner financing contract actually contains
Owner financing, also called seller financing, is not a single “contract” PDF. It is three documents that have to recite the same deal: the note (the promise to pay), the deed of trust (the lien), and the TREC 26-8 addendum your agent attaches to the purchase contract.
The kit is $49.95, one-time. Get the full forms. Walk the numbers first with the calculator. Agents: see TREC 26-8 elections.
The note: nine working parts
- Parties and principal (maker, payee, financed amount).
- Interest rate, stated as an annual percentage.
- ¶C payment structure: C(1), C(2), or C(3); only one is elected.
- Balloon / maturity date, if the term is shorter than amortization.
- Prepayment, late fee, and default rate: fixed TREC terms.
- Security recital pointing to the deed of trust of even date.
- Place of payment (our servicing address when you elect servicing).
- Default and acceleration cross-references.
- Signatures, notices, and Texas governing-law clause.
Fixed TREC 26-8 terms (not editable)
Maker may prepay in whole or in part at any time without penalty, with prepayments applied to the installments of principal last maturing and interest ceasing on the prepaid principal. A late fee of 5% applies to any installment not paid within 10 days of its due date. Matured unpaid amounts bear interest at 18% per annum or the highest lawful rate, whichever is less.
The deed: TREC-anchored elections
- ¶D(1) transfers: (a) consent not required with assumption, or (b) consent required with 26-8 carve-outs.
- ¶D(2) casualty insurance.
- ¶D(3) tax and insurance escrow, including a third-party servicer and who pays that cost.
- ¶D(4) acknowledgment of prior liens.
See the specimen card on the home page for how the numbers sit on the instrument. What is in the set.
Is an owner financing contract one document?
No. In Texas practice the “contract” is a set: the promissory note, the deed of trust, and the TREC Seller Financing Addendum (26-8) that the purchase contract already uses.
Can I edit the late-fee or prepayment language?
Not in our drafts. Those TREC 26-8 fixed terms are hard-coded so the note stays aligned with the addendum your agent is using.