Affordable Homeownership Access Act
Bill: H.R.5013 | Sponsor: Rep. Gonzalez, Vicente (D-TX)
Policy area: Finance and Financial Sector

Summary:
Affordable Homeownership Access Act
This bill exempts from certain mortgage licensing and registration requirements a person (other than a depository institution) who engages in owner financing. Owner financers (1) originate a limited number of residential mortgage loans in a year, and (2) only originate residential mortgages with respect to property owned by the owner financer.

To exempt small seller financers from certain licensing requirements, 
                        and for other purposes.

    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, 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) extends credit with respect to not more than 24 
        residential mortgage loans in a 12-month period; and
            ``(2) only extends 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 the sale of 
                a residential mortgage loan or extension of credit 
                relating to a residential property or manufactured 
                home, 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 not more than 24 residential mortgage 
                        loans or extensions of credit relating to a 
                        residential property or manufactured home; and
                            ``(ii) the residential mortgage loan or 
                        extension of credit [you can't really own an 
                        extension of credit] is owned by such a person 
                        or entity and serves as security for the 
                        property or manufactured home with which the 
                        residential mortgage loan or extension of 
                        credit is associated, provided that such loan 
                        or extension of credit--
                                    ``(I) in the case of a residential 
                                property, 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 
                                residential property which the 
                                residential mortgage loan is associated 
                                in the ordinary course of business of 
                                such person or entity;
                                    ``(II) in the case of a 
                                manufactured home, is not made by a 
                                person or entity that has manufactured 
                                the manufactured home;
                                    ``(III) is fully amortizing;
                                    ``(IV) 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;
                                    ``(V) 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
                                    ``(VI) meets any other criteria the 
                                Bureau may prescribe.''.

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 residential properties purchased for less 
        than $150,000 or 60 percent of the median home value in a given 
        census tract in the United States, whichever is lower, using 
        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 have not been sold 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 using 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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