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Contracts for Deed

Charting Risks and New Paths for Advocacy

By Heather K. Way & Lucy Wood

The foreclosure crisis has not dislodged homeownership from its central place in the American dream. For low-income homebuyers who cannot qualify for traditional mortgage financing, seller financing sometimes appears to be a magic wand that will open the door to their new homes. Unfortunately, one form of seller financing, the contract for deed, has been used to abuse low-income buyers across the country for years. Texas and other states have been reforming this practice, but vulnerable homebuyers still need more advocacy and legislative action to help them purchase homes safely.

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