Which loan type gives the buyer the title to the property but lets the seller's financing remain in place?

Which loan type gives the buyer the title to the property but lets the seller's financing remain in place?

• A. Deed of Trust
• B. Subject to Loan
• C. Recourse Clause
• D. Executory Contract

Answer: (B)

In a subject-to loan arrangement, the buyer takes title to the property while the seller’s existing financing stays in the seller’s name. The loan isn’t transferred or assumed by the buyer, but the buyer makes payments to the seller (who then passes them to the lender). The seller remains legally liable to the lender, so if the buyer stops paying, the lender can foreclose and the seller could face deficiency risk. This setup fits the idea of giving the buyer the title while keeping the seller’s financing in place.

In a subject-to loan arrangement, the buyer takes title to the property while the seller’s existing financing stays in the seller’s name. The loan isn’t transferred or assumed by the buyer, but the buyer makes payments to the seller (who then passes them to the lender). The seller remains legally liable to the lender, so if the buyer stops paying, the lender can foreclose and the seller could face deficiency risk. This setup fits the idea of giving the buyer the title while keeping the seller’s financing in place.