Bankapedia's Take

Vendor take back mortgages wax and wane in popularity depending on the mortgage market. In a hot real estate market when loans are easy to come by and sellers can pass on a buyer and still easily sell their house, you will rarely see a take back mortgage. In a slower market, take back mortgages are seen more often as it is the only choice a seller has in unloading their property. The buyer may not qualify for a traditional second mortgage or for zero down financing, thus the need for a vendor take back mortgage.

Understand that a take back mortgage must still have the blessing of the first lien holder. Often times they will put a cap on the max LTV of a second lien or seller contributions.

FHA loans allow only up to 6% seller contribution.