I 

114TH CONGRESS 

2D SESSION H. R. 5301 

To exempt small seller financers from certain licensing requirements and 

debt-to-income requirements for qualified mortgages. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 19, 2016 

Mr. WILLIAMS (for himself, Mr. MULVANEY, Mr. RUSH, Mr. CUELLAR, and 

Mr. NEUGEBAUER) introduced the following bill; which was referred to 

the Committee on Financial Services 

A BILL 

To exempt small seller financers from certain licensing requirements and debt-to-income requirements for qualified 

mortgages. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Seller Finance En5 hancement Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Real-estate seller financing is a transaction 

9 in which the owner of a real estate property provides 


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1 financing for the buyer of that property and the 

2 buyer makes some form of a down payment to the 

3 seller and then makes installment payments to the 

4 seller over a defined period of time. 

5 (2) Seller financers provide financing in lieu of 

6 the buyer choosing to obtain a loan from a bank. 

7 (3) The seller finance industry consists of small 

8 business owners who own real estate and provide fi9 nancing on those properties to underserved bor10 rowers who cannot or would prefer not to obtain tra11 ditional financing. 

12 SEC. 3. EXEMPTIONS FOR SELLER FINANCERS. 

13 (a) LOAN ORIGINATOR LICENSE OR REGISTRATION

14 REQUIREMENTS.—Section 1504 of the S.A.F.E. Mortgage 

15 Licensing Act of 2008 (12 U.S.C. 5103) is amended by 

16 adding at the end the following: 

17 ‘‘(c) EXCEPTION FOR SELLER FINANCERS.—The re18 quirements of this title shall not apply to any person 

19 (other than a depository institution) who— 

20 ‘‘(1) originates not more than 24 residential 

21 mortgage loans in a 12-month period; and 

22 ‘‘(2) only originates residential mortgage loans 

23 that are with respect to property that is owned by 

24 such person.’’. 


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1 (b) DEBT-TO-INCOME RATIOS UNDER QUALIFIED

2 MORTGAGES.—Section 129C(b)(2)(A) of the Truth in 

3 Lending Act (15 U.S.C. 1639c(b)(2)(A)) is amended by 

4 inserting at the end the following flush-left text: 

5 ‘‘In determining whether a residential mortgage 

6 loan is a qualified mortgage, guidelines and reg7 ulations issued pursuant to clause (vi) shall not 

8 apply to a loan originated by a person (other 

9 than a depository institution (as defined under 

10 section 3 of the Federal Deposit Insurance Act) 

11 or a credit union) who originates not more than 

12 24 residential mortgage loans in a 12-month 

13 period and only originates residential mortgage 

14 loans that are with respect to property that is 

15 owned by such person.’’. 

16 SEC. 4. REPORT ON SELLER FINANCING. 

17 (a) STUDY.—The Secretary of Housing and Urban 

18 Development and the Secretary of the Treasury shall 

19 jointly carry out a study on— 

20 (1) the number of homes bought for under 

21 $150,000 or 60 percent of the median home value 

22 in a given community, whichever is lower, in the 

23 United States by utilizing seller financing; 

24 (2) the number of homes described under para25 graph (1) sold by licensed mortgage brokers; 


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1 (3) the potential number of homes described 

2 under paragraph (1) which could be sold but aren’t, 

3 because seller financiers are unwilling, or from a 

4 practical standpoint unable, to comply with mort5 gage broker rules; and 

6 (4) the potential benefit to home values and 

7 wealth creation if more homes are able to be sold 

8 utilizing seller finance. 

9 (b) REPORT.—Not later than the end of the 1-year 

10 period beginning on the date of the enactment of this Act, 

11 the Secretary of Housing and Urban Development and the 

12 Secretary of the Treasury shall jointly issue a report to 

13 the Committee on Financial Services of the House of Rep14 resentatives and the Committee on Banking, Housing, and 

15 Urban Affairs of the Senate containing— 

16 (1) all findings and determinations made in car17 rying out the study required under subsection (a); 

18 and 

19 (2) data on the number of transactions utilizing 

20 seller financing 20 years, 15 years, 10 years, and 5 

21 years prior to the date of the enactment of this Act. 

Æ 


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