[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5013 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 5013
To exempt small seller financers from certain licensing requirements,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 13, 2021
Mr. Vicente Gonzalez of Texas (for himself 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,
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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