Hi All!

I recently became involved in the mobile home park industry with a new partner who has been doing it for a few years. As we are fixing up the parks and selling manufactured homes in spaces, we have been using seller financing since traditional financing is very difficult and expensive for the buyers. Seller financing helps us sell the homes much faster. 

In doing these seller financing loans, do we need to be compliant with the Dodd-Frank Act?  

If so, does anyone have a package or know what is needed to be compliant?

Thanks in advance!

In doing more research, it looks like we may need a Mortgage Loan Originator (or become one).

"For any individuals or entities that make more than 3 loans per year, the law requires that a Mortgage Loan Originator be involved to complete the transaction."

If anyone has any input or insight it would be greatly appreciated! 

Ask a real estate attorney in your area. There so much speculation about that huge law. The real estate attorneys in your area are doing these every day. See how they're doing it. In my state we don't have to do it we operate by Napoleonanic law, and if two people agree to it then it is so.

Hi Chad, 

Thanks for your response! Yes it seems there is a lot of speculation and have heard a few different answers from lenders I have talked to in my area. I was referred to a real estate attorney but they don't specialize in manufactured financing so in search of another one at the moment. I wish we operated under Napoleonanic Law as we are helping the consumer with affordable housing options that they would not be able to purchase if they went the traditional route (or if they did their interest rates would be very high). I know they are trying to update the law with the choice act because the Dodd-Frank has had unintended consequences that for some reason the Consumer Finance Protection Bureau wont rectify...

Former Congressman Barney Frank, who co-sponsored the legislation, said he was “regretful to realize” its negative impact not long after Dodd-Frank became the law of the land.

In a 2011 letter to a constituent, Frank wrote:

"I do not think it is necessary to include manufactured housing as part of our effort to prevent abusive mortgage practices, and I am now working with my staff to see if we can find a way to make a change that would deal with the problem you correctly point out… "

Many people swear by rent credits or lease-purchase options but there are myriad rules and nuisances to it. Definitely check with a local real estate attorney.

what are the pros and cons of rent credit route?

I wouldn't want to lead you astray. I know owners have been sued before over these types of arrangements. I use a lease-purchase option that was provided to me by my attorney.