Title: Affordable Homeownership Access Act
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 seller financing. Seller financers (1) originate a limited number of mortgage loans in a year that are each under a certain value, and (2) only originate mortgages with respect to property owned by the seller financer.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5614 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 5614

 To exempt small seller financers from certain licensing requirements.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 15, 2020

 Mr. Gonzalez of Texas (for himself, Mr. Cuellar, Mr. Gooden, and Mr. 
    Barr) 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 seller 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 seller and then makes installment payments to 
        the seller over a defined period of time.
            (2) Seller financers provide financing in lieu of the buyer 
        choosing to obtain a loan from a bank.
            (3) The seller finance industry consists of small business 
        owners who own real estate and provide financing on those 
        properties to underserved borrowers who cannot or would prefer 
        not to obtain traditional financing.
            (4) It is recognized that seller financers are governed by 
        each State's particular real estate and consumer protection 
        laws (including ability to repay, deceptive trade practices, 
        and usury laws), as well as State and Federal fair housing and 
        equal opportunity laws.
            (5) Neither of those laws described under paragraph (4), 
        nor the amendments made by this Act, are applicable to 
        transactions known as contracts for deed, land installment 
        contracts, lease options, options to buy, or rent-to-own 
        agreements.

SEC. 3. EXCEPTION FOR SELLER 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 Seller Financers.--The requirements of this 
title shall not apply to the following:
            ``(1) Real property seller financers.--Any person (other 
        than a depository institution) who, during any 12-month 
        period--
                    ``(A) originates no residential mortgage loan or 
                extension of credit secured by real property that 
                (together with any improvements thereto) has a value of 
                more than $200,000 (as calculated based on the 
                principal amount of the loan or extension of credit and 
                the amount of downpayment, if any);
                    ``(B) originates not more than 20 residential 
                mortgage loans or extensions of credit, where--
                            ``(i) each such residential mortgage loan 
                        or extension of credit is secured by real 
                        property that (together with any improvements 
                        thereto) has a value of $200,000 or less (as 
                        calculated based on the principal amount of the 
                        loan or extension of credit and the amount of 
                        downpayment, if any); and
                            ``(ii) at least one of such residential 
                        mortgage loans or extensions of credit is 
                        secured by real property that (together with 
                        any improvements thereto) has a value of more 
                        than $100,000 (as calculated based on the 
                        principal amount of the loan or extension of 
                        credit and the amount of downpayment, if any);
                    ``(C) originates not more than 30 residential 
                mortgage loans or extensions of credit, where each such 
                residential mortgage loan or extension of credit is 
                secured by real property that (together with any 
                improvements thereto) has a value of $100,000 or less 
                (as calculated based on principal amount of the loan or 
                extension of credit and the amount of downpayment, if 
                any); and
                    ``(D) only originates residential mortgage loans or 
                extensions of credit that are with respect to property 
                that is owned by such person.
            ``(2) Manufactured home seller financers.--Any person 
        (other than a depository institution) who, during any 12-month 
        period--
                    ``(A) originates not more than 30 loans or 
                extensions of credit that are primarily for personal, 
                family, or household use and that are 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
                    ``(B) only originates residential mortgage loans or 
                extensions of credit that are with respect to property 
                that is owned by such person.''.

SEC. 4. EXCEPTION FOR SELLER 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 
                        seller financing, in a 12-month period, for the 
                        sale of--
                                    ``(I) no property where the loan or 
                                extension of credit is secured by real 
                                property that (together with any 
                                improvements thereto) has a value of 
                                more than $200,000 (as calculated based 
                                on principal amount of the loan or 
                                extension of credit and the amount of 
                                downpayment, if any);
                                    ``(II) not more than 20 properties, 
                                where--
                                            ``(aa) each such loan or 
                                        extension of credit is secured 
                                        by real property that (together 
                                        with any improvements thereto) 
                                        has a value of $200,000 or less 
                                        (as calculated based on 
                                        principal amount of the loan or 
                                        extension of credit and the 
                                        amount of downpayment, if any); 
                                        and
                                            ``(bb) at least one such 
                                        loan or extension of credit is 
                                        secured by real property that 
                                        (together with any improvements 
                                        thereto) has a value of more 
                                        than $100,000 (as calculated 
                                        based on principal amount of 
                                        the loan or extension of credit 
                                        and the amount of downpayment, 
                                        if any); and
                                    ``(III) not more than 30 
                                properties, where each such loan or 
                                extension of credit is secured by real 
                                property that (together with any 
                                improvements thereto) has a value of 
                                $100,000 or less (as calculated based 
                                on principal amount of the loan or 
                                extension of credit and the amount of 
                                downpayment, if any); 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 seller determines in good 
                                faith and documents that the buyer has 
                                a reasonable ability to pay the seller;
                                    ``(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;''; 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 
                        seller 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 seller determines in good 
                                faith and documents that the buyer has 
                                a reasonable ability to pay the seller;
                                    ``(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;''.

SEC. 5. REPORT ON SELLER 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 $200,000 or 60 
        percent of the median home value in a given community, 
        whichever is lower, in the United States by utilizing seller 
        financing described under section 2;
            (2) the number of homes described under paragraph (1) 
        financed by licensed mortgage brokers or depository 
        institutions;
            (3) the potential number of homes described under paragraph 
        (1) which could be financed by licensed mortgage brokers or 
        depository institutions but are not, because seller financiers 
        are unwilling, or from a practical standpoint unable, to comply 
        with mortgage broker rules; and
            (4) the potential benefit to home values, neighborhood 
        stabilization, and family wealth creation through affordable 
        homeownership if more homes are able to be sold utilizing 
        seller financing.
    (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 seller 
        financing 20 years, 15 years, 10 years, and 5 years prior to 
        the date of the enactment of this Act.
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