A purchase money mortgage in Michigan is:
Question & Answer
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A mortgage from a bank only
A purchase money mortgage is not limited to bank financing. While banks can provide mortgages, this term specifically refers to seller-provided financing, not institutional lending.
Seller financing where seller takes back a mortgage
A government-backed loan
Government-backed loans (like FHA, VA, or USDA loans) have specific features and requirements that distinguish them from purchase money mortgages. They're not the same as seller-provided financing.
A construction loan
Construction loans are specifically designed for funding the construction of a property, not for standard purchase transactions like purchase money mortgages.
Why is this correct?
A purchase money mortgage is specifically defined as seller financing where the seller takes back a mortgage from the buyer as part of the purchase price. This occurs when the seller provides financing directly to the buyer rather than through a traditional lender.
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