Dodd-Frank

In depth

The Dodd-Frank Wall Street Reform and Consumer Protection Act overhauled consumer mortgage lending. Key provisions affecting seller financing include the ability-to-repay rule, the SAFE Act loan originator licensing requirements, restrictions on balloon payments and negative amortization for owner-occupied consumer loans, and required disclosures. Misconception: Dodd-Frank does not ban seller financing; it provides limited safe harbors for occasional sellers. Practically, individuals selling fewer than three properties per year to consumer-occupants typically qualify for the de minimis exception, while larger sellers must use a licensed RMLO and comply fully. Dodd-Frank applies only to residential property used as the buyer's primary residence; investor purchases and commercial sales are exempt. Always confirm current CFPB interpretations before structuring a seller-financed residential deal.