Intra-family Mortgage Loan Standards

Last Revised on March 31, 2022

In order to provide the greatest number of clients efficient, exceptional service, we target specific, common Family Mortgage transactions that allow us to offer a strong value. We sincerely believe that we’re the best at what we do, but sometimes, we’re simply not the right solution. We’re okay with this. Sometimes, complex real estate transactions require the exclusive expertise of a local attorney or other applicable service providers.

Please review our Standards below to help determine if your transaction falls within our service model.

If we’re the right fit, we look forward to helping you!

THE LOAN PURPOSE

To Seller Finance Residential Real Estate:

We support Intra-Family Seller Finance Loans in the following US states:

Alabama, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois*, Indiana, Kentucky, Louisiana, Massachusetts, Maine, Maryland, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin.

This means the property being sold is located in one of these states listed directly above.

* If the subject property is located in Cook, Kane, Peoria, or Will County, unfortunately, we cannot help you.

Buying a home from a relative isn’t too different from buying a home from anyone else. All Seller Finance transactions are considered “Private Financing” and the Loan Documents must be included in the Buyer’s / Seller’s settlement with the local closing attorney, title company, or escrow company, that will otherwise conduct the Buyer’s / Seller’s real estate settlement. The type of settlement agent is determined by state regulations and customs.* It is the settlement agent’s responsibility conduct a title search on the property, generate and register a new warranty deed, and to oversee and confirm the execution of the Loan Documents and the government registration of the real estate lien.

* If the property being sold is in Texas, we require the real estate closing must be conducted by either a Texas law firm or a Fee Attorney. A Fee Attorney refers to a lawyer who has entered into a contractual relationship with a title insurance company, or who serves as an agent of a title insurance company, to close real estate transactions on its behalf in exchange for a portion of the title insurance premium.

THE LOAN PARTIES

A National Family Mortgage ® only supports loans between immediate family members as defined below. We cannot support the creation of backdated Loan Documents or the creation of Loan Documents after-the-fact.

All Borrowers and Lenders/Sellers must be US residents and have either a US Social Security Number or Tax ID Number. The Lender and at least one Borrower must share one of the following relationship dynamics, including adoptive and step relationships:

Grandparent <> Grandchild
Parent <> Child
Sibling <> Sibling
Aunt/Uncle <> Nephew/Niece

If the Lender/Seller is legally married and lending personally, then their spouse must also appear on the loan as Lender #2. Likewise, if the Borrower is legally married, then their spouse must also appear on the loan as Borrower #2 and also appear on the deed / title of the subject property.

Loans may also be made from or to a Trust, (Family, Irrevocable/Revocable, Living, Realty), provided the Grantor/Trustee of the Trust and at least one counter-party (Borrower/Lender) share one of the family relationship dynamics listed directly above.

We do not support loans between Spouses, Ex-Spouses, Cousins, Godparents/Godchildren, Friends, Colleagues, or loans to or from family-owned FPs, FLPs, LLCs, LPs, LLPs, PLLCs, S-Corps, Land Trusts, Life Estates, or Self-Directed IRAs.

The Lender/Seller may not co-own the subject property with the Borrower.

Borrower signature via Power of Attorney is not supported.

International notarization of Loan Agreements is not supported.

THE PROPERTY DETAILS

All intra-family Loans will be secured by a residential single-family home, condominium, or townhouse located in the US. Single-family homes may include a properly permitted Accessory Dwelling Unit (ADU).

The property may be the Borrower’s primary residence, secondary residence (vacation home), or an investment (rental) property.

All intra-family loans will be secured by a Promissory Note and the proper state and county specific real estate lien as either a primary lien or a secondary lien, including any Riders and Addenda as appropriate.

Mortgage | Deed of Trust | Security Deed (One of these three lien types will be used, as required by state law.)

We do not facilitate loans secured by the following types of properties, especially when zoned as such by local authorities:

Agricultural / Farm Land
Co-Operatives
Commercial / Retail Property
Duplex / Multi-Family Property
Foreclosure Properties and/or Short-Sales
Forest, Mountain, Rural Property
Intentional Communities
Leasehold Properties
Manufactured Homes
Mobile Homes / Tiny Homes
Relocation Properties (Corporate Relocation Package)
Tenant in Common Property
Vacant Land

We do not facilitate transactions documented under the following circumstances or agreements:

Construction Loans
Contract for Deed
Leasehold Agreements
Lease to Purchase Agreements
Wrap-Around Mortgages

THE LOAN TERMS

We currently offer two products with three available Loan structures:

The Win-Win Mortgage ® : Amortized (Fixed payment of Principal & Interest) or Amortized with Balloon

The Gift Mortgage ® : Interest-Only

All intra-family loans must meet or exceed the proper IRS Applicable Federal Rate at the time the loan is made.

All intra-family loan repayment terms and/or amortization period must be between 1 – 30 years.

All intra-family loan late payment fees charged to the Borrower shall be a minimum of 1.00% and a maximum of 3.00% of the Borrower’s standard monthly payment amount.

All intra-family loans include a payment grace period of 15 days.

All intra-family loans have no pre-payment penalty.

LOAN SERVICING POWERED BY FCI LANDER SERVICES, INC.

We highlight optional Loan Servicing powered by FCI Lender Services, Inc. for Loan Documents generated through our software platform. If you’ve already documented your intra-family loan some other way, and are only interested in the Loan Servicing, we can’t help you.

THE ONLINE SETUP FORM

The Loan Setup Form should be submitted no more than three weeks before the projected real estate closing date / settlement date, and no less than two weeks before the projected real estate closing / settlement date.

Either the Borrower or the Lender/Seller may submit our online Setup Form and submit our one-time setup fee, with the following exceptions:

(1) If the subject property is in Kentucky, Maryland, Texas, or Virginia, then the Borrower must submit the online Setup Form and submit our one-time setup fee.

The setup fee must be paid by either the Lender or the Borrower, subject to the Standards above, and cannot be paid by some related third party (like another family member or an advisor.)

Each individual Lender and Borrower must have their own, unique email address.

THESE STANDARDS ARE NOT ALL INCLUSIVE AND YOUR UNIQUE OR UNUSUAL CIRCUMSTANCE MAY NOT BE SUPPORTED BY OUR PLATFORM. WE DON’T MAKE ANY EXCEPTIONS TO THESE STANDARDS. IF YOUR SPECIFIC, UNIQUE TRANSACTION IS NOT SUPPORTED BY OUR PLATFORM, PLEASE CONSULT A LOCAL ATTORNEY OR OTHER APPLICABLE SERVICE PROVIDER FOR HELP.

PLEASE DOWNLOAD THE APPROPRIATE FREE PRODUCT GUIDE, WHICH ALSO INCLUDES THESE STANDARDS ABOVE, AS WELL AS ADDITIONAL INFORMATION ABOUT APPLICABLE DOCUMENT RECORDING TAXES THAT APPLY IN THE FOLLOWING STATES:

Alabama, Florida, Georgia, Minnesota, Maryland, New York, Tennessee, Virginia.