Owner Financing Changes in Texas
May 31, 2010 will mean some big changes in the way Owner Financing is legal in Texas. The Federal Government legislated what is called the SAFE act and with the provisions of that act all states within one year of this federal law going into effect, each state had to pass their own implementation of the legislation. Texas had to do it or the federal government was going to implement it on us. In the past if a seller sold 5 or fewer 1 to 4 family homes they were able to do so without having a license. As of May 31, 2010 that rule will go away and the new legislation will be in effect. There are 2 new exemptions,
(1) The owner must be selling their primary residence
(2) The owner is only allowed to sell to immediate family member, ie, son, daughter, mother or father
In order to sell and owner finance any other property the owner must have a Residential Mortgage Loan Originator license. The legislation includes only 1-4 residential property(single home, duplex or fourplex). It does not apply to commercial property or unimproved property. Those are the only way seller financing is allowable in Texas after May 31, 2010. If you have questions you may contact the Texas Real Estate Commission.