Save Act and Interest Rates

OK guys, here we go some more…

If selling a POH on an installment sale and charge no interest are you still subject to the vile SAFE Act?

Just playing around with some numbers and found there is only a $37 difference between the monthly payments on 0% vs 5% loan of $16,995 for 48 months — an amount I would happily give up if it fixes things.

Yes. Interest rates are not relevant to this law.
Payments are.

Don’t try to skirt the law. Use a (MLO) mortgage loan originator.
It costs some $$, but keeps you in compliance.


Please tell me more about MLO s. I was trying to find a mortgage broker to handle it in SD without luck; the few that are there only work for a bank and don’t do private money deals, so I found an attorney to do it.

MLO’s basically charge you $1,000 to check 10 key metrics (more or less) on your buyers finances, employment history, etc as to whether it is “affordable” and the risk of default is acceptable.

You’ll need to find one that works on loans for private paper. Most banks’ in house MLO’s will only do it for their portfolio.

There is debate among many whether an MLO is the only thing you need to do for compliance, but that’s another very long thread.