Is 25% Seller Holdback ok for "down payment" on new 1st?

Hey guys… I have found two small apartment buildings (7 and 8 units) where each seller has agreed to take back 25% of the sales price as a 2nd mortgage for 4-5 years.

Will this partial seller financing qualify as a “downpayment” with regard to the new first mortgage for 75% of the sales price?

Both properties would sell for 15-20% under appraised value and are stable, cash-flowing and in a good location.

One seller is moving. The other is getter older and his health is failing. Both properties need some exterior TLC.

Anyway to do these?


CaptainKip - you will need to ask the lender(s) you are planning to use. I have seen both answers - some lenders will not consider that down payment and will ask you to bring your own money to closing. Other lenders will accept that as your down payment. As you probably know lenders are tightening their criteria - so I would expect that more lenders fall in the first category. Good luck!