Take over the seller's low-rate mortgage. No new loan qualification.
What is Subject-To?
Subject-To is a home purchase where the buyer takes over the seller's existing mortgage payments while the original loan remains in the seller's name. The property title transfers to the buyer at closing, but the underlying mortgage is not refinanced. The buyer benefits from the seller's existing interest rate (often 3-5% from pre-2022 loans).
| Requirement | CasaFlex | Traditional Bank | FHA |
|---|---|---|---|
| Interest rate | 3-5% (seller's rate) | 7-8% (current) | 7-8% |
| Credit score | None | 620+ | 580+ |
| Down payment | 5-15% | 20% | 3.5% |
| Time to closing | 2-3 weeks | 30-45 days | 45-60 days |
| Loan in whose name | Seller's (with servicing) | Buyer's | Buyer's |
Subject-to is a home purchase where you take over the seller's existing mortgage payments while the original loan stays in the seller's name. The property title transfers to you at closing, but the underlying loan is not paid off. You benefit from the seller's existing interest rate.
You inherit the seller's existing interest rate. If they got their mortgage before 2022, that could be as low as 3-4% — dramatically lower than today's 7% bank rates.
CasaFlex subject-to deals typically require 5-15% down. Less than owner finance because you're not creating a new loan.
Most mortgages have a due-on-sale clause allowing the bank to call the loan due if the property transfers. In practice, this is rarely enforced as long as payments continue on time. CasaFlex uses a servicing agreement through a third-party title company to ensure payments are always on schedule.
No. Since you're not applying for a new loan, no credit bureau report is required.
2-3 weeks typically. Faster than owner finance because there's no new loan to originate.
When you sell or refinance, the original mortgage gets paid off from the sale proceeds. Any equity above the loan balance is yours.