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Real estate Q&A: New mortgage rules affect loans between family members

Gary M. Singer, a Florida attorney, answers questions about real restate.

Q: We have a rental property that we're trying to sell to our tenant. He's having problems with financing, so we want to give him a short-term loan. But we're being told we might not be able to do this. What gives?


Q: We want to give a loan to our daughter and son-in-law so they can buy their first home. But we're facing resistance. What's going on here?


A: Both questions have to do with new federal laws that were enacted after the mortgage meltdown called the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The law created strict rules for making loans to prevent another boom and bust. These rules do not affect lending on business or commercial properties, but they do apply to individual consumers.

Basically, the law set forth rules concerning the loan terms and who can get a mortgage. It bans lenders from offering mortgages that borrowers would not be reasonably able to pay back. In making a loan, a consumer must use the same approval process that an institutional mortgage lender would use. Violators could be fined and the mortgage invalidated.

These guidelines have few exceptions and even cover mortgage loans between family members. I recommend you speak to a lawyer who specializes in Dodd-Frank.



Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at or follow him on Twitter @GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.


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