I have been involved in several owner financing transactions. You always need to make sure you are protecting your interests so please do consult an attorney. There are several companies who specialize in this type of transaction in the Austin area. I was able to help a client short sale their home and find a more modest owner financed home they could afford. This worked out great for them as they would not currently qualify for a mortgage. Their situation warranted the owner finance option as they were downsizing and getting their finances back on track.
Make sure you actually close in a title company just as you would in any normal purchase transaction. Although all lenders frown upon this type of transaction and have acceleration clauses in their disclosures as long as they get a check each month for the mortgage payment I have not found one to act on it.
This is a complicated transaction where you can easily get burned. Make sure you do your homework and hire an experienced real estate attorney that has done these transactions before.
Best of luck to you.
REALTOR | Mortgage Broker | Consultant
Keller Williams Realty | 360 Lending Group