Usury in Michigan and PL 96-221 - Posted by Lucas

Posted by Lucas on February 06, 2002 at 09:07:44:

Thanks for the information.


Usury in Michigan and PL 96-221 - Posted by Lucas

Posted by Lucas on February 03, 2002 at 11:50:57:

After seeing the recent mention of usury laws in one of the other threads, I decided to look up the information for Michigan (my state).

According to what I’ve found, the “legal rate of interest” is 5% and the “general usury limit” is 7%.

However, I have also found something that implies these rates might not be applicable to what many mobile home investors are doing.

This document (linked to above) makes a reference to Public Law 96-221 (PL 96-221), stating: “PL 96-221 also preempts state usury ceilings by allowing any rate of interest for virtually all first lien mortgages and mobile home loans as well as first lien mobile home installment contracts.”

PL 96-221 was rejected by some states, so it doesn’t apply everywhere, but Michigan accepted it. I have been trying to find a copy of this federal law to examine it, but the internet search engines haven’t come up with one.

From the description, PL 96-221 sounds like it would allow mobile home first liens to exceed the normal interest rate ceilings, but I haven’t been able to confirm this.

Does anyone know if the proper interpretation of this law really is what it seems like?

What about other people working in Michigan, how have you handled the interest rates?


Re: Usury in Michigan and PL 96-221 - Posted by Blane (MI)

Posted by Blane (MI) on February 05, 2002 at 14:19:16:


Can’t quote the exact law off the top of my head, but one of the exemptions to the limits is if a corporation is doing the lending (hmmm, that probably exempts just about everybody, eh?). Anyways, the maximum legal limit in Michigan is 25% for mortgages, 11% for land contracts.