How HUD Safe Act Will Hurt Seller Financing

Be afraid!

HUD is poised to take away our rights to offer owner or seller financing on property we own. Under the Safe Mortgage Act proposal, you can only offer owner financing on the home you live in or you must become a licensed mortgage originator.

Here’s how I see it. If we own a property, ANY property (whether it is our residence or not), we should be able to sell to a buyer with owner financing.

HUD’s proposal is to provide an exemption to “where an individual seller provides financing to a buyer pursuant to the sale of the seller’s own residence” (Item F Page 66551 of the HUD Summary Comments).

Unfortunately, this exemption does not go far enough. What if you bought the property lived in it and then moved? What if it is now a rental property, inherited, or simply bought for investment purposes?

At a minimum the exemption should be extended to include any transaction where the seller provides financing to a buyer pursuant to the sale of property the seller owns (regardless of whether it is the seller’s residence). Read more

Top 5 Articles on Seller Financing

Owner financing was a hot topic in real estate last year and all indicators point to increased demand in 2010.

In search of alternative financing methods, Read more

Does Seller Financing Qualify for the $8,000 First Time Homebuyer Tax Credit?

Great news!  The IRS has specifically answered “YES” to this question.

It seemed pretty straight forward that owner financed transactions involving a deed to the buyer and a note and mortgage (or deed of trust) back to the seller would let qualified buyers take the First Time $8,000 Homebuyer Credit.  However, some wondered if Read more

Owner Financing – The Top 3 Reasons for Seller Financing

All things being equal, the average seller would prefer to sell a property and walk away from closing with all cash rather than a note for part of the sale price.

Then why do sellers agree to take back financing? Here are the three most common reasons behind the installment sale. Read more

The Many Faces of an Owner Financed Buyer

Have you ever tried to describe the “typical” buyer purchasing property where the seller provides financing? Many mistakenly think of only those that are “down and out” on their luck.

Let go of preconceived notions and start looking at seller financing as a potential creative financing solution. Read more

The Downside of Owner Financing – Disadvantages to Seller Financing

What’s old is new again and the credit crisis, struggling economy, and declining real estate market are making seller financing the come back kid of 2009.

Offering to owner finance a property can attract buyers and even save transactions as banks increasingly stamp “DECLINED” on mortgage applications.  Before you agree to “Be the Bank” carefully consider the downside to providing creative financing. Read more

Owner Financing – 10 Advantages to Using the Seller Carry Back

The word is out and seller financing is on the rise as buyers and sellers look for creative ways to finance property in the struggling market.

So what’s all the hype? Here are ten advantages to using the seller carry back to buy or sell real estate. Read more

UPDATE on HR 1728: How Congress Wants to Change Seller Financing

There is growing and legitimate concern over how Bill HR 1728 would severely restrict seller financing. Be sure to read this informative update. Read more

Using Owner Financing with the $8,000 First Time Home Buyers Tax Credit

The government is offering first time home buyers an $8,000 tax credit in an effort to stimulate the ailing real estate market.

Sellers can attract buyers by highlighting the refund in their ads, especially when used in conjunction with owner financing. Read more

Why Save Owner Financing From HR 1728?

Owner financing has provided a safe harbor for buyers and sellers battered by the tsunami waves of the mortgage and real estate crisis.

Rather than embracing the safety net offered by private parties the government wants to severely restrict the owner financed installment sale.

In May NoteInvestor.com reported the potential disaster that would ensue if the current version of HR 1728 The Mortgage Reform and Predatory Lending Act was enacted (Read: How Congress Wants to Change Seller Financing).

The response and concern has been encouraging with many readers requesting sample letters to use in communication with their State Senator.

We are pleased to share this sample letter Read more

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