Hooray! Private residential loans are now allowed again!

Last year, the Illinois Residential Mortgage License Act of 1987 was amended to, among other things, remove the exemption from mortgage licensing from private persons or entities who originate less than three residential mortgage loans in any given year.  The law effectively made it illegal for a dad to give a 5% home mortgage loan to his son.  The law also made it illegal to sell a property by way of articles of agreement for deed.

Good news!  The State of Illinois has once again amended the Illinois Residential Mortgage License Act of 1987 and  as of July 14, 2011, the exemption allowing limited private residential loans has been re-added as follows:

205 ILCS 635/1-4(d)(1.8) Any person or entity that does not originate mortgage loans in the ordinary course of business, but makes or acquires residential mortgage loans with his or her own funds for his or her or its own investment without intent to make, acquire, or resell more than 3 residential mortgage loans in any one calendar year.

This should help out with private transactions on hard to move properties and opens up one additional area of possibility - the articles of agreement for deed aka installment land contract - for sellers looking to move a parcel of real property.