Owner Financing in Louisiana

Everything you need to know about bond for deed contracts, wrap mortgages, and seller-financed transactions in Louisiana.

What Is Owner Financing?

Owner financing is a real estate transaction in which the seller acts as the lender. Instead of the buyer obtaining a mortgage from a bank, the buyer makes payments directly to the seller according to agreed-upon terms -- interest rate, payment schedule, and duration.

In Louisiana, owner financing is common for investment properties, properties that do not qualify for traditional financing, and situations where both parties prefer a direct arrangement. The two primary legal structures are the bond for deed and the wrap-around mortgage, each with distinct implications for title transfer, buyer protections, and default remedies.

Regardless of the structure chosen, both parties benefit from working with a title company to ensure clean title, proper documentation, and compliance with Louisiana law.

Bond for Deed vs Wrap Mortgage

Feature	Bond for Deed	Wrap Mortgage
When title transfers	After all payments are completed	At closing (buyer receives title immediately)
Governing statute	La. R.S. 9:2941 et seq.	General Louisiana mortgage law
Buyer rescission right	10-day rescission period (cannot be waived)	No statutory rescission period
Default remedy for seller	Statutory cancellation process (La. R.S. 9:2945)	Foreclosure (executory process or ordinary process)
Recording requirement	Must be recorded to protect buyer's interest	Act of sale and mortgage recorded at closing
Title insurance	Binder at signing, full policy at final act of sale	Issued at closing
Common use case	Buyer cannot qualify for bank financing; seller wants to retain title until paid	Seller has existing mortgage and wraps buyer's payments around it
Loan servicing	Recommended via licensed escrow agent (e.g., Southern Loan Servicing)	Recommended to ensure underlying mortgage stays current

Louisiana Legal Framework

La. R.S. 9:2941 — Bond for Deed Act

Governs the creation, execution, and enforcement of bond for deed contracts in Louisiana. Requires that the contract be in writing, sets minimum content requirements, and establishes the buyer's right to a 10-day rescission period that cannot be waived by contract.

10-Day Rescission Period

Louisiana law gives the buyer in a bond for deed transaction the right to cancel the contract within 10 days of signing and receive a full refund of all payments. This protection exists regardless of what the contract says -- it cannot be waived, shortened, or modified by agreement of the parties.

La. R.S. 9:2945 — Cancellation Notice

If a buyer defaults on a bond for deed contract, the seller must follow specific cancellation procedures. The seller must provide written notice of default, give the buyer an opportunity to cure, and cannot simply terminate the contract or evict the buyer without following the statutory process.

How Southern Title Facilitates Owner-Financed Transactions

Whether you are structuring a bond for deed or a wrap mortgage, Southern Title provides the title, closing, and compliance services you need.

Title Search & Examination

We search parish records to verify that the seller has clear title and identify any liens, judgments, or encumbrances that need to be resolved before the transaction.

Document Preparation

We prepare the bond for deed contract, act of sale, mortgage, promissory note, and related documents in compliance with Louisiana law.

Compliance Review

Our team reviews the transaction structure to ensure compliance with La. R.S. 9:2941 (for bond for deed) and other applicable Louisiana statutes governing real estate finance.

Closing & Recording

We conduct the closing at any of our five Greater New Orleans offices, notarize documents, and record them with the parish clerk of court to protect all parties' interests.

Escrow Services

We hold earnest money deposits and facilitate the orderly transfer of funds between buyer and seller.

Loan Servicing Handoff

Our sister company, Southern Loan Servicing, provides payment collection, escrow management, tax and insurance tracking, and borrower communication for the life of the loan.

Analyze Your Owner-Financed Deal

Use our free Bond for Deed & Wrap Seller Analysis tool to see your monthly spread, cash flow, balloon alignment, and a side-by-side amortization comparison between your underlying mortgage and the wrap or bond for deed.

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Related Resources

Bond for Deed Guide

Step-by-step guide to how bond for deed works in Louisiana, common mistakes, and the cancellation process.

Bond for Deed Services

Learn how Southern Title supports bond for deed transactions from contract to final closing.

Owner Financing Services

Closing and document preparation for seller-financed and hard money transactions.

Bond for Deed & Wrap Seller Analysis

Free calculator for seller spread analysis, cash flow, and amortization comparison.

Frequently Asked Questions

What is owner financing in Louisiana?+

Owner financing (also called seller financing) is a real estate transaction where the seller acts as the lender, allowing the buyer to make payments directly to the seller over time instead of getting a bank mortgage. In Louisiana, the two most common structures are the bond for deed (contract for deed) and the wrap-around mortgage. Each has different legal implications for title transfer, buyer protections, and default remedies.

What is the difference between a bond for deed and a wrap mortgage?+

In a bond for deed, the seller retains title until the buyer completes all payments. In a wrap mortgage, the buyer receives title at closing and the seller holds a mortgage (vendor's lien). The key difference is when title transfers: at the end of the contract (bond for deed) or at the beginning (wrap mortgage). Bond for deed transactions are governed by La. R.S. 9:2941 and have specific buyer protections that do not apply to wrap mortgages.

Does Louisiana law require a rescission period for bond for deed contracts?+

Yes. Louisiana law provides a 10-day rescission period during which the buyer can cancel a bond for deed contract and receive a full refund of any payments made. This right cannot be waived in the contract. The rescission period begins when the contract is signed, not when it is recorded.

What happens if a buyer defaults on a bond for deed in Louisiana?+

The seller must follow the cancellation procedures required by Louisiana law (La. R.S. 9:2945). The seller must provide written notice of default and allow the buyer a cure period. The seller cannot simply evict the buyer or consider the contract canceled without following these steps. If the buyer has paid 50% or more of the purchase price, additional protections may apply.

Do I need a title company for an owner-financed sale?+

While not legally required, using a title company is strongly recommended. A title search protects the buyer from purchasing a property with hidden liens or title defects. Document preparation ensures the contract complies with Louisiana law. Recording the contract protects the buyer's interest against third-party claims. Southern Title handles all of these steps for owner-financed and bond for deed transactions.

How does Southern Title facilitate bond for deed transactions?+

Southern Title provides title search and examination, document preparation in compliance with La. R.S. 9:2941, contract recording with the parish clerk of court, escrow services, and coordination of the final act of sale when the buyer completes all payments. Our sister company, Southern Loan Servicing, handles payment collection and escrow management during the contract period.

Setting Up an Owner-Financed Sale?

Contact Southern Title for title search, document preparation, and closing services for your owner-financed or bond for deed transaction.