If you own the house, and you’re not doing more than three deals a year, you don’t need to do anything different.
[Except (at least) in California all seller financing to consumers is subject to both the SAFE Act and FranknDodd crap.]
Otherwise, you can finance “investors” only, and avoid those onerous regulations.
You can’t charge more than 8 points above the Federal Reserve Prime Rate, without being an institutional lender, and the rate can’t be adjustable, or have balloon terms shorter than 60 months. However, any other terms and conditions are limited only to what you can negotiate.
Meantime, if you get a big enough down payments, you’ll eliminate the predator borrowers that would take advantage of the ‘Frankendodd’ rules by defaulting, and then suing for all their payments back, etc.
Otherwise, you can simply use a ‘loan originator,’ which is practically the same as using an attorney, to close on your financing transactions, which is more elegant and professional in the first place.
The main issues with ignoring ‘Frankendodd,’ is that it attracts predator borrowers.
Again, you can’t finance homeowner buyers for less than five years.
Buyers have to be deemed as ‘qualifying’ for the loans by a loan originator, and if not, and the buyer defaults, he can claim ‘fraud,’ and subsequently demand all his money back including the down payment, principal and interest paid.
So, either plan on not getting paid anytime soon; having your financing terms and rates dictated by the government; or only offering financing to investors.
Things could change, but that’s my understanding as of today.
[Updated 6/26/14]