[Hal Cranmer]

Hal Cranmer

I may have a highest bidder/highest downpayment sale opportunity. The owners don’t have much equity in the property but could sell it with owner financing. Suppose I get someone with the highest downpayment interested in owner financing. What do the seller and I need to do to ensure they are ‘qualified’ or other rules in order to do things legally with the Dodd Frank rules? Isn’t the whole point of seller financing for people who can’t qualify for a mortgage in these cases? If they can’t qualify, doesn’t that mean you can’t provide them a loan or a note? Sorry but this is really confusing to me.

[Jackie Lange]

Jackie Lange

Since the owner will be going to contract directly with the buyer, you do not need to worry about Dodd-Frank. Dodd-Frank only applies when investors are selling houses with seller financing.

An owner, who is not an investor, can sell 1 house per year without worry of Dodd-Frank.

[Nickolas Bubolz]

Nickolas Bubolz

That means the owner could have a balloon payment for their seller financing deal?

[Jackie Lange]

Jackie Lange

Yes, but I would not advise it. Buyers hate balloon payments. It would be better to have an esculating interest rate to encourage the buyer to refinance and an incentive for the sellers to keep it going longer because they make more.

Alternately, have a balloon but the option to pay $x for an extension

[Nickolas Bubolz]

Nickolas Bubolz

Thanks for the help.