Land records · Parcel maps · October 7, 2026
What Is a Due-on-Sale Clause in a Mortgage?
What is a due-on-sale clause? A mortgage term letting the lender demand full payment if the property is transferred, with federal exceptions.
What is a due-on-sale clause? A due-on-sale clause, also called an acceleration or alienation clause, is a provision in a mortgage or deed of trust that allows the lender to demand payment of the entire loan balance if the borrower sells or transfers the property, or an interest in it, without the lender’s consent. The clause prevents buyers from simply taking over a seller’s low-rate loan. A federal law, the Garn-St Germain Act, generally makes due-on-sale clauses enforceable but lists certain transfers of homes for which lenders cannot exercise them. This page is general land-records background, not legal advice.
What triggers the clause
Typical mortgages say the lender may require full payment if all or any part of the property, or any interest in it, is sold or transferred. That can include: - A sale to a buyer. - A deed to a new owner, including relatives in some cases. - A transfer to an LLC or corporation. - Some long-term leases or lease-options. - A wraparound mortgage or land contract.
The lender has the option to call the loan; it does not have to.
Federal exceptions for homes
For residential property with fewer than five units, federal law bars lenders from enforcing a due-on-sale clause for certain transfers, including:
| Transfer | Example |
|---|---|
| To a spouse or children | Adding a spouse to title |
| Death of a borrower, to a relative | Inheritance by family |
| Divorce or separation decree | Spouse awarded the home |
| Into a living trust | Borrower remains beneficiary and occupant |
| Death of a joint tenant | Surviving co-owner |
| Junior lien | Second mortgage that does not transfer occupancy |
| Short lease | Lease of three years or less without a purchase option |
See how to put a house in a trust.
Transfers not protected
Transfers to an LLC, to unrelated people, or most sales to buyers are not protected. See how to transfer property to an LLC.
Loan assumptions
Some loans, such as many FHA, VA, and USDA loans, can be assumed by a qualified buyer with lender approval. In that case, the lender consents and the clause is not triggered.
What happens if the lender calls the loan
The borrower must pay the full balance, usually by refinancing or selling. If not, the lender can foreclose.
Where to find the clause
The clause is in the recorded mortgage or deed of trust, often in a section titled “Transfer of the Property or a Beneficial Interest in Borrower.” The note may contain related terms.
Bottom line
A due-on-sale clause lets a lender demand full payment when the property is transferred without consent. Federal law protects certain home transfers, such as to a spouse, heirs, or a living trust, but not most sales or LLC transfers. Check the recorded security instrument and talk to the lender before transferring. Find county recorders via the Platbookmapper map.
What is a due-on-sale clause FAQ
What is a due-on-sale clause?
A mortgage term allowing the lender to demand full payment upon transfer.
Can my lender call my loan if I add my spouse to the deed?
Federal law generally protects that transfer for homes.
Does transferring to a living trust trigger due-on-sale?
Generally not, if the borrower remains a beneficiary and occupant.
Can a buyer assume my mortgage?
Only if the loan allows assumption and the lender approves.
Does an LLC transfer trigger the clause?
It can, since LLC transfers are not on the federal exception list.