One method real estate investors have employed over the years involves helping buyers qualify for financing by either providing a second mortgage behind a new first loan or financing a transaction entirely. Either way helps an investor move a property while at the same time getting respectable returns from the interest charged on the note.

Oh, and let’s not forget about helping the buyers buy your property in the first place. Seller financing has always been a tool in a real estate investor’s shed. New rules in place starting in January of 2014 change that landscape somewhat.

Beginning January 10 of 2014, the Consumer Financial Protection Bureau, or CFPB, enforces new statutes which regulate how many loans a property owner may finance over the course of one year without obtaining a residential mortgage license. Owner financing is still allowed but if the owner finances more than three properties over a 12 month period, a license may be required. A residential mortgage license is no small matter, either, requiring a 20-hour pre-licensing course in addition to passing a state and national mortgage exam plus a continuing education requirement. Is that a big deal?

For most real estate investors, probably not. While providing owner financing is a vehicle to help sell a property, unless the investor is heavily involved with owner financing as a critical part of the business plan. For example, a real estate investor may sell manufactured housing in a mobile home park and offer financing as part of the package.

Additional requirements regulate the nature of the note issued by the owner. The loan must be fully amortized and be either fixed for the life of the loan or fixed for at least the first five years of the note. The owner/financier must also determine the buyer’s ability to repay the new loan. This is accomplished by keeping the buyer’s monthly obligations, including the new loan, at or below 43 percent of the buyer’s gross monthly income.

If you rarely use owner financing, these new guidelines will have little effect on your business. If owner financing is a critical piece of your financial puzzle, then you may need to obtain a mortgage license for the area where your properties are located.