Texas · TREC 26-8Texas seller financing addendum (TREC 26-8)
When the seller finances all or part of the price in Texas, the parties use TREC 26-8. The buyer delivers credit documents within the days written; if they are late, the seller may terminate and keep the earnest money, and if they arrive, the seller has 7 days to reject the buyer's credit in its sole discretion – otherwise the credit is deemed approved. The addendum then sets the note and the deed of trust terms.
Credit approval (¶A–B)
Credit documentation
Within the days written after the Effective Date: any of a credit report, employment and salary verification, verification of funds on deposit, a current financial statement or other items checked.
If not delivered
The seller may terminate by notice any time before all of it is furnished – and the earnest money is paid to the seller.
Seller's 7 days
If delivered, the seller may terminate within 7 days after the delivery deadline or actual delivery, whichever is later, if it finds the buyer's credit unacceptable – earnest money refunded. No notice means the credit is deemed approved.
The note and deed of trust (¶C–D)
Promissory note
Amount and interest rate written in; prepayment allowed without penalty; a 5% late fee on an installment not paid within 10 days; matured unpaid amounts bear 18% or the highest lawful rate, whichever is less. Payment: one lump sum, monthly installments, or interest-only then installments.
Transfers
Either consent not required (a later buyer assumes the note) or consent required – a sale, a lease over 3 years or a lease-option without the seller's consent lets the seller call the note due. Either way the buyer stays liable unless released.
Insurance and escrow
Whether the buyer must insure with the seller as loss payee, and whether taxes and insurance are paid through an escrow with the seller (optionally serviced by a third party).
Prior liens
A default on any superior lien is a default under the seller's deed of trust.
What the TC tracks
- The credit documentation deadline – late delivery puts the earnest money at risk.
- The seller's 7-day credit approval window, counted from the later of the deadline or actual delivery.
- That the parties have an attorney and financial professional review it – the form itself says so.
- That the title company or attorney prepares the note and deed of trust in time for closing.
Questions about Texas seller financing
Which TREC form is used for owner financing in Texas?
The Seller Financing Addendum, TREC No. 26-8.
How long does a Texas seller have to approve the buyer's credit?
7 days after the deadline for the credit documents or their actual delivery, whichever is later; without a termination notice the credit is deemed approved.
What if the buyer does not deliver the credit documents?
The seller may terminate any time before they are all furnished, and the earnest money is paid to the seller.
What is the late fee in the TREC seller financing addendum?
5% of any installment not paid within 10 days of the due date.
Is the buyer released if a later buyer assumes the seller-financed note?
No. The buyer stays liable on the note unless the seller gives a release of liability.
Texas forms
Add the credit documentation deadline and the seller's 7-day approval window as dated tasks on the deal in ClosingCode, with reminders before each one.
Start free trialSource: Texas Real Estate Commission, TREC No. 26-8 Seller Financing Addendum (11-07-2022, effective February 1, 2023), ¶A–D.
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.