I own a 131 lot mobile home community in NC, all with individual electric, water and dedicated septic systems in place. Out of the 131 lots, I currently hold title to 45 units which I have seller financed directly with well-qualified (credit and criminal checks) individual buyers. These are all owner occupied units and no rentals are allowed in our community. Our collection rate is 95%, but I recently became aware that I may be in violation of the Dodd-Frank rule (which I only thought applied to big banks, etc.). I want to make sure that we’re compliance, so I was wondering if anyone had experience in working with a finance company to buy out their existing seller-financed notes? This would help me pay down my big note, minimize the risk of compliance issues and then allow me to focus on filling up the remainder of my community. Remaining lots include 42 lot rentals and 44 vacant lots ready for new homes.
I’m not an expert on this by any means, but what I’ve heard and read to avoid issues with Dodd-Frank is to do a rent-to-own or lease purchase contract with the tenants in those homes.