[WSBARP] Private loans

[Mark Anderson]

One additional consideration of which I am aware is related to the minimum interest rate to be charged in a situation involving "family loans."  The minimum federal rate, also known as the "Applicable Federal Rate," sets the lowest amount of interest that must be charged on a loan.  The AFR is published by the IRS every month.  If the rate is below this, the risk exists that the IRS will consider the loan a gift and tax the transaction accordingly.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Craig Gourley
Sent: 07/14/2022 12:19 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Private loans

Listmates.  I suddenly have several separate clients wanting to make private loans to refinance home loans for relatives, friends etc.  These are NOT seller financing.  These are "let me pay off your existing mortgage and you can make payments to me" cases.   I have some knowledge of Dodd Frank and the State regulations and I know that there are exceptions for seller financing.  Are there any exceptions for these non-seller financing loans secured by the borrower's personal residence?  Work arounds?  I appreciate any input. Thanks, Craig


GOURLEY LAW GROUP
THE EXCHANGE CONNECTION
SNOHOMISH ESCROW
P.O. Box 1091
Snohomish, WA 98291
PH:  (360) 568-5065 (800) 291-8401
Fax: (360) 568-8092

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