Yes, subject-to is legal in all 50 states, though it carries the due-on-sale clause risk and other complexities. Consult a real estate attorney before doing your first deal.

Whose credit does the loan affect?

The loan stays in the seller's name and on the seller's credit. Late payments by the buyer will damage the seller's credit — disclose this clearly.

Investing strategy

Subject-To Real Estate Investing

Take over the seller's loan, keep the property — subject-to explained.

What does subject-to mean?

In a subject-to deal, you buy the property and take title 'subject to' the existing mortgage. The loan stays in the seller's name; you make the payments. It works best with motivated sellers facing foreclosure or relocation.

Due-on-sale clause risk

Most mortgages have a due-on-sale clause letting the lender call the entire balance when title transfers. In practice lenders rarely call performing loans — but the risk exists. Many subject-to investors use land trusts to obscure the title transfer.

When subject-to makes sense

Best for low-rate assumable equity (a seller with a 3% loan when current rates are 7%), distressed sellers with little equity, or sellers needing to move fast.

Run Subject-To deals in FlipOS

FlipOS includes a deal analyzer with subject-to built in, plus project management, CRM, and budgets for after the deal closes.

Start free

Frequently asked questions

Is subject-to legal?: Yes, subject-to is legal in all 50 states, though it carries the due-on-sale clause risk and other complexities. Consult a real estate attorney before doing your first deal.
Whose credit does the loan affect?: The loan stays in the seller's name and on the seller's credit. Late payments by the buyer will damage the seller's credit — disclose this clearly.