SAFE ACT - seller financing and contracts for deed

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The SAFE Act is affecting anyone in the real estate business.  Anyone that knows more please submit comments.  
Here is something my attorney wrote to me:

There is some confusing information out there about the SAFE Act as it pertains to purchases of real estate made with a self directed IRA. As you know, the Act places restrictions on lending.  However, the Act defines a loan originator as an individual who (1) takes a residential mortgage application and (2) offers to negotiate terms of a residential mortgage loan for compensation or gain. There is always the possibility that an individual state could broaden this language but most states will most likely follow these provisions.
There is a concept floating around that says that insofar as self directed IRA are considered an entity, and not an individual, the minimum standards of the Act will not affect the ability of self directed IRA owners to lend money to an individual or an entity. 
This concept should be looked at more closely. The new Frank-Dodd Act provides that up to 3 SAFE  Act covered loans could be done per year by each person.  Person being individual, corporation, LLC, trust, etc.  Since a self directed IRA is a trust, it would be a person under the Act and be subject to the restriction of only being allowed to do 3 loans.  Remember covered loans are any loan for consumer purposes, not just investment or business. 
Any other thoughts on this?  I do not think this affects lease options at all.  Any links or interviews someone has a link to that will help with the SAFE ACT?


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Wendy Patton

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