Sell-Financing and Dodd-Frank after remodel

[Antonia Partridge]

Hi All,

I am a owner/seller looking for an interpretation of the term "Builder" under Dodd-Frank in the one transaction per 12 months exclusion for seller financing without a Mortgage Loan Originator.  In 2009 I purchased and owner occupy a single family home originally constructed in 1914.  I've pulled a few building permits from my city and finished the attic, expanded the kitchen and added a laundry room.  All together my work as owner-builder had nearly doubled the sqft of the house.  I did the work myself and I don't have a contractors license.

So my question for you all: Do I qualify to take the Dodd-Frank one transaction per 12 month exclusion and offer owner financing, or am I disqualified as I builder?  Follow up question: If I need to involve an MLO to comply with DF, what should I look for to know they are qualified?  

Please include a reference in your answer if you have one.

Thanks Antonia

[Gerald Demers]

Hello @Antonia Partridge.  First off, well done on your investment.  I don't have the DF info you seek, but I do have a suggestion.  If you use an investor friendly MLO, you will create a full doc loan; all the official paperwork.  The advantage to doing this is that if, in the future, you ever need to sell that note, the market for buyers of a full doc loan is much bigger and it looks like a much safer investment to other investors which means you won't have to discount it so much.  

Gerald Demers