A family of curves over a discrete valuation ring is called semi-factorial if every line bundle on the generic fibre extends to a line bundle on the total space. In the nodal case, we give a sufficient and necessary condition for semi-factoriality, in terms of combinatorics of the dual graph of the special fibre. In particular, we show that performing one blow-up centered at the non-regular closed points yields a semi-factorial model of the generic fibre. As an application, we extend Raynaud's construction of the Néron (lft)-model of the jacobian of the generic fibre of a family of nodal curves to the case where the generic fibre is singular.