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	No general statutory 10-day rescission period under La. R.S. 9:2941	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	Ask the title company what coverage is available and when it becomes effective	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

Defines a bond for deed as a contract to sell real property in which the purchase price is paid in installments and the seller agrees to deliver title after the stipulated amount is paid.

Rescission Language

La. R.S. 9:2941 is a definitions provision; it does not create a general 10-day rescission period. Any contractual rescission language should be reviewed by the parties' attorney.

La. R.S. 9:2945 — Cancellation Notice

Under La. R.S. 9:2945, the cancellation notice is served through the escrow agent by registered or certified mail, and the buyer has a fixed 45-day period to cure measured from the mailing date.

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 and coordinates the title, recording, escrow, and closing work with the parties and their legal professionals under applicable Louisiana law.

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). La. R.S. 9:2941 defines the bond for deed arrangement, and other provisions in the statutory framework address recordation, encumbrances, and cancellation.

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

No general 10-day rescission period is created by La. R.S. 9:2941. The parties should have an attorney review any contractual cancellation or rescission language and the specific transaction facts before signing.

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

Under La. R.S. 9:2945, the cancellation process includes notice through the escrow agent by registered or certified mail and a fixed 45-day cure period measured from the mailing date. The seller cannot simply evict the buyer or consider the contract canceled without following the required process.

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, 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.