One borrower, one home, two lenders. The mortgage interest deduction belongs to you, the borrower, regardless of who the money came from. The structure splits the financing: a non-QM lender carries 50%, the seller carries a 40% second, and you put 10% down. Interest you pay the non-QM lender on the first and interest you pay the seller on the carried second are both deductible to you, subject to the usual mortgage-interest deduction rules and limits. The flip side is that the recipients owe tax on that interest. The seller carrying the second reports the interest they collect as taxable income, the same way they would any other lending income. That's how carried financing works on both ends. One caution: mortgage-interest deductibility has real conditions (loan-size caps, acquisition versus other debt, and so on), and a split structure like this can raise questions a standard purchase doesn't. Confirm the specifics with a CPA or tax advisor before relying on the deduction, so the write-off you're counting on actually holds up for your situation.