Seller Financing Available for Properties on Kauai’s North Shore

There are many reasons why seller financing (aka “owner financing”) exists in today’s real estate market. It can be a viable option for buyers seeking non-conventional loans, and a great way for sellers to make extra money by acting as a bank and earning interest.  

The days of “stated income” loans are long gone, and although banks ARE still lending to qualified buyers, lenders are being much more cautious when approving loans. This is especially true with land loans, which generally require a balloon payoff of around 3 years. For the layman, this means in addition to the large down payment of 35% to 50% at purchase, the remaining balance will be expected to be paid in full in 3(+/-) years for land loans, or construction must be commenced.

Seller will consider partial financing on this gorgeous Wailapa Rd. parcel (MLS# 251342)

Wailapa Rd., overlooking the Kahili River and on the road to Rock Quarry beach (Same parcel)

A comprehensive list of Kauai North Shore properties offering full or partial owner financing is located at the bottom of this article past the pros and cons section…

Seller Financing Terms and Conditions

With seller financing, negotiating the terms of the loan becomes very subjective. Typically, sellers will require a large down payment, similar to what a bank might require, yet as always, this is negotiable. The remaining balance is set to terms agreed upon between buyer and seller written in an Agreement of Sale, or a Purchase Money Mortgage (PMM) submitted with the offer.  

Terms can be as simple as an annual (or semiannual) lump payment of “x” amount for “x” number of years. More typically, terms are based on a 30 (or 15 or 20) year mortgage payoff at “x” percent interest to arrive at a monthly payment, and additional lump payments are factored in to pay off the balance. In most cases, the seller(s) will only carry the balance for a few years, not the full 30 years.

Seller Financing Pros*

  • Buyer and seller can negotiate terms…interest rate, repayment schedule, etc.
  • For land loans, the buyer does not necessarily have to commence a construction project at time of payoff
  • Both buyer and seller can make substantial savings in closing costs
  • The borrower does not have to qualify with a loan underwriter
  • There are no PMI insurance premiums unless specified
  • The seller can receive a higher return on his/her investment via interest
  • The seller could negotiate a higher interest rate
  • The seller could negotiate a higher selling price
  • The property could be sold “as is” so there would be no need for repairs
  • The seller could choose which security documents (mortgage, deed of trust, land sales document, etc.) to best secure his/her interest until the loan is paid

Seller Financing Cons*

  • The buyer could pay the loan in full but still not receive title due to other encumbrances not divulged by, or unknown to the seller
  • The buyer could make payments faithfully, but the seller might not make payments on any senior financing that may be in place, thus subjecting the property to foreclosure
  • The buyer might not have the protection of a home inspection, mortgage insurance, or an appraisal to ensure that he/she is not paying too much for the property
  • The seller might not get the buyer’s full credit or employment picture, which could make foreclosure more likely
  • Depending upon the security instrument that was used, foreclosure could take up to a year
  • In the event the seller accepts a small initial down payment from the buyer, the buyer could fail to perform because of the minimal investment that was at stake

Kauai Properties That Offer Seller Financing

This beautiful home, also on Wailapa Rd. Kilauea, offers owner financing

Here is a list of active listings that included mention of full or partial financing available as of today, Feb 1, 2013:


  • (MLS# 253417) Kilauea, 1 bed/1 bath, 507 sq.ft., $939,000
  • (MLS# 249154) Kilauea, 3 bed/3.5 bath, 2,674 sq.ft., $1,650,000
  • (MLS# 258575) Kilauea, 3 bed/3.5 bath, 3,967 sq.ft., $2,495,000
  • (MLS# 250123) Anini, 2 bed/2 bath, 2,144 sq.ft., $2,500,000
  • (MLS# 230455) Wainiha, 3 bed/3.5 bath, 2,000 sq.ft., $1,195,000
  • (MLS# 235903) Haena, 5 bed/3 bath, 1,728 sq.ft., $995,000



  • (MLS# 245259) Anini, 3 bed/3.5 bath, 2,864 sq.ft., $2,295,000
  • (MLS# 245262) Princeville, 3 bed/3 bath, 1,732 sq.ft., $798,900

*Pros and cons section sourced from Wikipedia, and modified

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April 5, 2021

MLS # 236980
Land 17 acres

Owner financing option?
May I please get more information on this property


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