# Is owner financing legal in South Carolina?

Source: https://www.landxchange.com/faq/is-owner-financing-legal-in-sc
Publisher: LandXchange (landxchange.com)
Coverage: vacant land in South Carolina

Owner financing on vacant (unimproved) land in South Carolina is generally legal, but a deal can trigger federal lending laws if it looks too much like a residential mortgage. The line is clearer than most sellers realize once you know where to look.

## Can I sell my SC vacant land with owner financing?

Yes, vacant land is generally exempt from the federal Dodd-Frank Act and SAFE Act provisions that govern owner-financed homes. Those laws were aimed at residential mortgages on owner-occupied dwellings. Vacant land carries fewer restrictions, but you should still have a licensed SC attorney draft the promissory note and deed of trust.

## What about the SAFE Act?

The SAFE Act requires anyone making more than three residential mortgage loans per year to be licensed as a mortgage loan originator. Vacant land typically falls outside this because it is not a residential dwelling. If you owner-finance more than three deals per year, talk to an SC real estate attorney about your specific situation.

## Does LandXchange handle owner-financing paperwork?

No. LandXchange does not draft, service, or guarantee owner-financing notes, that would put us in the mortgage-origination business. We help sellers describe their willingness to owner-finance in their listing, but the actual note and deed of trust must be drafted and recorded by a licensed SC real estate attorney or title company.

## What is a typical owner-financing structure for vacant land?

Common in SC: 10-30% down, 7-10% interest, 5-15 year amortization, with a final balloon. Specific terms negotiated between buyer and seller. The buyer signs a promissory note and a deed of trust (recorded against the property); the seller holds the lien position until paid off.

## Sources

- [Regulation Z, 12 CFR 1026.2(a)(19), definition of "dwelling" (CFPB)](https://www.consumerfinance.gov/rules-policy/regulations/1026/2/): A dwelling is "a residential structure that contains one to four units". Vacant land with no structure on it is not a dwelling, which is why the federal rules aimed at owner-financed HOMES generally do not reach raw land. Note the flip side: the moment a dwelling exists or is being financed for construction, those rules can apply.

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LandXchange is a marketplace technology platform, not a real estate broker, law firm, or appraiser. Information here is general, for specific transactions, work with a licensed professional.