Periods of high mortgage interest rates that characterized the early 1980s have escalated the use of assumption financing in home buying. In these periods, there is an increased demand for alternative sources of financing and a movement away from conventional sources. The purpose of this study is to provide a theoretical and empirical analysis of the effect of the increased use of assumption financing on selling prices of single-family residential housing. Aside from physical characteristics, the financing arranged by the homebuyer is considered a major influence in determining house prices. This is especially true in real estate appraisal practice where differences in types of financing are one of the major categories of adjustment (see [1], [4], and [10]).