Affordable Homeownership Access Act
This bill exempts from certain mortgage licensing and registration requirements a person (other than a depository institution) who engages in seller financing. Seller financers (1) originate a limited number of mortgage loans in a year that are each under a certain value, and (2) only originate mortgages with respect to property owned by the seller financer.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5614 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 5614
To exempt small seller financers from certain licensing requirements.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 15, 2020
Mr. Gonzalez of Texas (for himself, Mr. Cuellar, Mr. Gooden, and Mr.
Barr) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To exempt small seller financers from certain licensing requirements.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Affordable Homeownership Access
Act''
SEC. 2. FINDINGS.
Congress finds the following:
(1) Real-estate seller financing is a transaction in which
the owner of a real estate property provides financing for the
buyer of that property and the buyer makes some form of a down
payment to the seller and then makes installment payments to
the seller over a defined period of time.
(2) Seller financers provide financing in lieu of the buyer
choosing to obtain a loan from a bank.
(3) The seller finance industry consists of small business
owners who own real estate and provide financing on those
properties to underserved borrowers who cannot or would prefer
not to obtain traditional financing.
(4) It is recognized that seller financers are governed by
each State's particular real estate and consumer protection
laws (including ability to repay, deceptive trade practices,
and usury laws), as well as State and Federal fair housing and
equal opportunity laws.
(5) Neither of those laws described under paragraph (4),
nor the amendments made by this Act, are applicable to
transactions known as contracts for deed, land installment
contracts, lease options, options to buy, or rent-to-own
agreements.
SEC. 3. EXCEPTION FOR SELLER FINANCERS WITH RESPECT TO LOAN ORIGINATOR
LICENSE OR REGISTRATION REQUIREMENTS.
Section 1504 of the S.A.F.E. Mortgage Licensing Act of 2008 (12
U.S.C. 5103) is amended by adding at the end the following:
``(c) Exception for Seller Financers.--The requirements of this
title shall not apply to the following:
``(1) Real property seller financers.--Any person (other
than a depository institution) who, during any 12-month
period--
``(A) originates no residential mortgage loan or
extension of credit secured by real property that
(together with any improvements thereto) has a value of
more than $200,000 (as calculated based on the
principal amount of the loan or extension of credit and
the amount of downpayment, if any);
``(B) originates not more than 20 residential
mortgage loans or extensions of credit, where--
``(i) each such residential mortgage loan
or extension of credit is secured by real
property that (together with any improvements
thereto) has a value of $200,000 or less (as
calculated based on the principal amount of the
loan or extension of credit and the amount of
downpayment, if any); and
``(ii) at least one of such residential
mortgage loans or extensions of credit is
secured by real property that (together with
any improvements thereto) has a value of more
than $100,000 (as calculated based on the
principal amount of the loan or extension of
credit and the amount of downpayment, if any);
``(C) originates not more than 30 residential
mortgage loans or extensions of credit, where each such
residential mortgage loan or extension of credit is
secured by real property that (together with any
improvements thereto) has a value of $100,000 or less
(as calculated based on principal amount of the loan or
extension of credit and the amount of downpayment, if
any); and
``(D) only originates residential mortgage loans or
extensions of credit that are with respect to property
that is owned by such person.
``(2) Manufactured home seller financers.--Any person
(other than a depository institution) who, during any 12-month
period--
``(A) originates not more than 30 loans or
extensions of credit that are primarily for personal,
family, or household use and that are secured by a
security interest on a manufactured home (as defined
under section 603 of the National Manufactured Housing
Construction and Safety Standards Act of 1974); and
``(B) only originates residential mortgage loans or
extensions of credit that are with respect to property
that is owned by such person.''.
SEC. 4. EXCEPTION FOR SELLER FINANCERS IN THE DEFINITION OF MORTGAGE
ORIGINATOR.
Subparagraph (E) of section 103(dd)(2) of the Truth in Lending Act
(15 U.S.C. 1602(dd)(2)) is amended--
(1) by redesignating subparagraphs (F) and (G) as
subparagraphs (G) and (H), respectively;
(2) by amending subparagraph (E) to read as follows:
``(E) does not include, with respect to a
residential mortgage sale, a person or entity
(including a corporation, partnership, proprietorship,
association, cooperative, estate, or trust) if--
``(i) such a person or entity provides
seller financing, in a 12-month period, for the
sale of--
``(I) no property where the loan or
extension of credit is secured by real
property that (together with any
improvements thereto) has a value of
more than $200,000 (as calculated based
on principal amount of the loan or
extension of credit and the amount of
downpayment, if any);
``(II) not more than 20 properties,
where--
``(aa) each such loan or
extension of credit is secured
by real property that (together
with any improvements thereto)
has a value of $200,000 or less
(as calculated based on
principal amount of the loan or
extension of credit and the
amount of downpayment, if any);
and
``(bb) at least one such
loan or extension of credit is
secured by real property that
(together with any improvements
thereto) has a value of more
than $100,000 (as calculated
based on principal amount of
the loan or extension of credit
and the amount of downpayment,
if any); and
``(III) not more than 30
properties, where each such loan or
extension of credit is secured by real
property that (together with any
improvements thereto) has a value of
$100,000 or less (as calculated based
on principal amount of the loan or
extension of credit and the amount of
downpayment, if any); and
``(ii) each piece of real property
described under clause (i) is owned by such a
person or entity and serves as security for the
loan or extension of credit, provided that such
loan or extension of credit--
``(I) is not made by a person or
entity that has constructed, or acted
as a general contractor for the
construction of, a residence on the
property in the ordinary course of
business of such person, corporation,
association, estate, or trust;
``(II) is fully amortizing;
``(III) is with respect to a sale
for which the seller determines in good
faith and documents that the buyer has
a reasonable ability to pay the seller;
``(IV) has a fixed rate or an
adjustable rate that is adjustable
after 5 or more years, subject to
reasonable annual and lifetime
limitations on interest rate increases;
and
``(V) meets any other criteria the
Bureau may prescribe;''; and
(3) by inserting after subparagraph (E) the following:
``(F) does not include, with respect to a
residential mortgage loan or extension of credit, a
person or entity (including a corporation, partnership,
proprietorship, association, cooperative, estate, or
trust) if--
``(i) the loan or extension of credit is
seller financed and is a consumer loan or
extension of credit secured by a security
interest on a manufactured home (as defined
under section 603 of the National Manufactured
Housing Construction and Safety Standards Act
of 1974); and
``(ii) each home described under clause (i)
is owned by such a person or entity and serves
as security for the loan or extension of
credit, provided that such loan or extension of
credit--
``(I) is not made by a person or
entity that has manufactured the
manufactured home;
``(II) is fully amortizing;
``(III) is with respect to a sale
for which the seller determines in good
faith and documents that the buyer has
a reasonable ability to pay the seller;
``(IV) has a fixed rate or an
adjustable rate that is adjustable
after 5 or more years, subject to
reasonable annual and lifetime
limitations on interest rate increases;
and
``(V) meets any other criteria the
Bureau may prescribe;''.
SEC. 5. REPORT ON SELLER FINANCING.
(a) Study.--The Secretary of Housing and Urban Development and the
Secretary of the Treasury shall jointly carry out a study on--
(1) the number of homes bought for under $200,000 or 60
percent of the median home value in a given community,
whichever is lower, in the United States by utilizing seller
financing described under section 2;
(2) the number of homes described under paragraph (1)
financed by licensed mortgage brokers or depository
institutions;
(3) the potential number of homes described under paragraph
(1) which could be financed by licensed mortgage brokers or
depository institutions but are not, because seller financiers
are unwilling, or from a practical standpoint unable, to comply
with mortgage broker rules; and
(4) the potential benefit to home values, neighborhood
stabilization, and family wealth creation through affordable
homeownership if more homes are able to be sold utilizing
seller financing.
(b) Report.--Not later than the end of the 1-year period beginning
on the date of the enactment of this Act, the Secretary of Housing and
Urban Development and the Secretary of the Treasury shall jointly issue
a report to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) data on the number of transactions utilizing seller
financing 20 years, 15 years, 10 years, and 5 years prior to
the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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