A person is not a loan originator under 1026.36(a)(1) if seller financing is provided for three or fewer properties in any 12-month period, each owned by and securing the financing to the seller, the seller has not built or contracted to build a residence on the property in the ordinary course of business, and the financing is fully amortizing, is one the seller determines in good faith the buyer can reasonably repay, and carries a fixed rate or an adjustable rate that resets no sooner than five years with reasonable periodic and lifetime caps tied to a widely available index (12 CFR 1026.36(a)(4)). A natural person, estate or trust financing the sale of only one such property in a 12-month period is excluded under the same ownership and no-construction conditions if the financing has no negative amortization and the same rate-structure conditions, without the ability-to-repay determination the three-property exclusion requires (12 CFR 1026.36(a)(5)).
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