Escrow & Title
In Illinois, a 'purchase money mortgage' is:
AA mortgage provided by the government to assist first-time buyers
BA mortgage given by the seller to the buyer as part of the purchase price, rather than obtaining financing from a third-party lender✓ Correct
CA type of construction loan that covers both land and improvements
DA mortgage specifically for purchasing investment properties
Explanation
A purchase money mortgage (seller financing or owner financing) is when the seller acts as the lender—they extend credit to the buyer as part of the sale. The buyer gives the seller a note and mortgage instead of (or in addition to) obtaining third-party financing. In Illinois, purchase money mortgages may be used when a buyer cannot qualify for conventional financing or when the seller wants to generate interest income. These transactions require careful documentation.
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