Dodd Frank - Can private seller subordinate and carry back a second mortgage?


Hi All,

I have not done any seller financing since Dodd Frank and I am wondering what I need to be aware of…or even if I can still do this?


Free & Clear House. (No Due On Sale Clause)
My Private lender will loan me 60% for a 1st Position Only.
Seller willing to subordinate and carryback the balance up to 5 years (would require a balloon to make the payments reasonable).
I would find/sell to a tenant/buyer.

Is this possible under DF?
There is so much scattered info out there…I am just not clear?
What do I need to do to comply?
What are the pitfalls?



No worries. You can do a Dodd-Frank type loan a year without any problem. If the house is free and clear it is the Seller who has to worry about Dodd-Frank potentially, but the Buyer doesn’t have to worry. It might be simpler to do a Sandwich Lease Option anyway. If your lender is sort term (1 year or something like that) you have a timing issue. You need to know both the amount, the term, and the rate. Without all of the equation it is tough to know your options.


Speaking with an experienced real estate attorney may also be a good idea - they do tend to keep abreast of the new laws that impact on real estate.