[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3464 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 3464

 To exempt small seller financers from certain licensing requirements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 18, 2023

 Mr. Barr (for himself, Mr. Vicente Gonzalez of Texas, Mr. Posey, and 
 Mr. Cuellar) 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 owner 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 owner, receives the deed or title to the home 
        and then makes installment payments to the owner over a defined 
        period of time.
            (2) Owner financers provide financing in lieu of the buyer 
        choosing to obtain a loan from a bank.
            (3) The owner finance industry consists of small business 
        owners who own real estate and provide financing on those 
        properties to underserved buyers who cannot or would prefer not 
        to obtain traditional bank or loan based financing.
            (4) Owner financers are governed by real estate and 
        consumer protection laws (including, but not limited to, 
        ability to repay, deceptive trade practices, and usury laws) of 
        each State, as well as State and Federal fair housing and equal 
        opportunity laws.
            (5) Using owner financing will benefit home values, 
        increase neighborhood stabilization, and assist with family 
        wealth creation through increased homeownership as more homes 
        are sold with owner financing.
            (6) None of the amendments made by this Act, are applicable 
        to transactions known as Contracts for Deed or Land Installment 
        Contracts that are not lawfully recorded, Lease Options, Lease 
        with Option to buy and Rent to Own.

SEC. 3. EXCEPTION FOR OWNER 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 Owner Financers.--The requirements of this 
title shall not apply to any person (other than a depository 
institution) who--
            ``(1) extend credit with respect to not more than 24 
        residential mortgage loans in a 12-month period; and
            ``(2) only extend credit with respect to residential 
        mortgage loans that are with respect to property that is owned 
        by such person.''.

SEC. 4. EXCEPTION FOR OWNER 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 
                        owner financing, in a 12-month period, for the 
                        sale of 24 properties; 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 owner determines in good 
                                faith and documents that the buyer has 
                                a reasonable ability to pay the owner;
                                    ``(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 by rule;''; 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 
                        owner 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 owner determines in good 
                                faith and documents that the buyer has 
                                a reasonable ability to pay the owner;
                                    ``(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 by rule;''.

SEC. 5. REPORT ON OWNER 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 $150,000 or 60 
        percent of the median home value in a given community, 
        whichever is lower, in the United States by utilizing owner 
        financing;
            (2) the number of homes described under paragraph (1) 
        financed by licensed mortgage brokers;
            (3) the potential number of homes described under paragraph 
        (1) which could be sold but aren't, because owner financiers 
        are unwilling, or from a practical standpoint unable, to comply 
        with mortgage broker rules; and
            (4) the potential benefit to home values and wealth 
        creation if more homes were to be sold utilizing owner finance.
    (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 owner 
        financing 20 years, 15 years, 10 years, and 5 years prior to 
        the date of the enactment of this Act.
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