A vendor take-back (VTB) mortgage is a creative financing arrangement where the seller provides part of the financing. No product to apply for — but understanding this tool can help you close deals others can't.
VTBs bridge the gap when a buyer can't get full traditional financing. The seller "takes back" a note secured against the property they just sold.
Instead of receiving full cash at closing, the seller agrees to be paid part of the purchase price over time — secured by a mortgage on the property. Common in commercial and investment property deals.
Buyers use VTBs when they can't qualify for full traditional financing — combining a conventional first mortgage with a VTB second mortgage from the seller to make up the full purchase price.
VTB rates and terms are set by negotiation between buyer and seller — typically at or above conventional mortgage rates. Terms commonly range from 1–5 years.
VTBs are most common in commercial real estate, land purchases, power of sale scenarios, and investment property deals where buyers need creative gap financing.
The seller becomes a creditor — if the buyer defaults, the seller must pursue collection or power of sale. Sellers should obtain independent legal advice before agreeing.
VTBs are negotiated privately between buyer and seller. We can help structure the deal, advise on the primary mortgage component, and connect you with real estate lawyers experienced in VTB arrangements.
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