All about
Bond for Deed
Learn the facts, know the risks, and get help if you’ve been trapped by a bond for deed contract.
For help, please click below or call (630) 690-6500. We will add you to our contact list and follow up as soon as we can.
Stay Informed!
Not every bond for deed contract is predatory, but they can include hidden terms that are risky for buyers, including:
Eviction
If you miss a payment, you may face eviction from a home you purchased. You lose all the money you’ve invested into the property.
Unfair Terms
With less oversight, sellers can include illegal or unfair terms in contracts, often shifting more costs onto the buyer.
High interest rates
Sellers might charge interest rates as high as 11-18%, which is illegal in some situations.
Maintenance & repairs
Your home could require many costly repairs that you are responsible for completing.
What is Bond for Deed?
Bond for deed contracts (also known as land sales contracts, installment sales contracts, seller-financing, and rent-to-own) are an alternative to a mortgage when purchasing a home. While a mortgage is an agreement between the bank and the buyer, bond for deed is an agreement between the seller and the buyer (“seller-financed”). The seller and buyer negotiate a contract which governs the sale.
In Illinois, these contracts are governed by the Installment Sales Contract Act. While bond for deed contracts are legal, sellers have many opportunities to include hidden and unfair terms. This can turn a great housing opportunity into a scam that drains your bank account and violates your civil rights. If you think you’re trapped in an unfair bond for deed contract, contact HOPE.
How do I identify a bond for deed scheme?
While bond for deed contracts are legal, they can sometimes contain hidden terms that create lots of risk for buyers. To determine if your contract is predatory, ask yourself the following:
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- Was the down payment lower than typical, such as only a few thousand dollars?
- Am I making monthly payments to the seller?
- Was there no credit check?
- Does my interest rate seem very high?
- Was/is the home sold “as-is”? Am I expected to make all needed repairs in addition to my monthly payments?
- Do I not hold the title to the home until I pay off the entire amount I owe?
- Will I be evicted like a renter if I don’t make all of my payments, rather than face foreclosure like other homeowners?
If you said yes to some/all of these questions, you may be a victim of a bond for deed scheme.
How do I get help?
HOPE is currently investigating a predatory bond for deed scheme in the East St. Louis area. If you have a bond for deed contract, contact HOPE Fair Housing Center to learn more about your rights.
Attend our Free Training!
HOPE will be delivering a free fair housing training in East St. Louis. All are invited to attend to learn your rights and get the facts about bond for deed. Click below to register.
When: Thursday, April 16th | 5:30-7pm
Where: St. Louis Public Library