Alaska recently amended its law regarding exemptions from mortgage lender, broker, and loan originator licensing requirements to, among other things, exempt bona fide nonprofit organizations and seller-financed lenders from certain requirements. The changes for bona fide nonprofits will become effective on January 1, 2020. Seller-financing license exemptions became effective on July 8, 2019.
Bona fide nonprofit organizations are now exempt from the mortgage loan and broker requirements. Individual employees are exempt from mortgage licensing requirements if they are acting as a mortgage loan originator with respect to their duties to the bona fide nonprofit organization, and the residential mortgage loans have terms favorable to the borrower by being consistent with mortgage loan origination for a public or charitable purpose rather than in a commercial context.
Individual sellers of seller-financed mortgage loans secured by the dwelling are also exempt from mortgage loan originator licensing requirements, with the amended law now allowing up to five properties to be seller-financed in a 12-month period. Among other requirements of the amended statute, seller-financing mortgagees may not construct the dwelling that secures the loan on the property or act as a contractor for it. Additionally, the loan must have a full-term, fixed interest rate and not have a payment schedule that results in negative amortization any prepayment penalties.