Washington State Department of Financial Institutions

Residential Seller Financing

The activity of financing the sale of residential real estate is regulated at both the state and federal levels. In Washington the Consumer Loan Act, chapter 31.04 RCW and chapter 208-620 WAC, regulates the lending of money or extension of credit for family, personal, or household use. This includes financing residential mortgages and that can include financing the sale of raw land or vacant lots. Regulation under the Consumer Loan Act begins with the licensing process. Licensing is twofold in that both companies and individual mortgage loan originators must license.

There are some exemptions from licensing at both the company and individual levels. The company level exemptions are found at RCW 31.04.025. The individual level exemptions are found at WAC 208-620-105.

A license waiver is available pursuant to RCW 31.04.025(3) for eligible transactions under the Consumer Loan Act. We will issue a license waiver for eligible seller financed residential mortgage loan transactions. An eligible transaction is one in which the seller owns the property being sold, is selling to a buyer for their family, personal or household use, is carrying the financing taking an interest in the property, and who is not subject to the federal law that requires the licensing of mortgage loan originators. Please access the link below at "More Information" to continue reading about seller financing.

More Information: About Residential Seller Financing in Washington (PDF)*


License Waiver Steps

  1. Print the License Waiver (PDF)*
  2. Fill out the license waiver, including the declaratory portion at the bottom, and return it to the Department via email to lfazio@dfi.wa.gov, via fax to the attention of Cindy Fazio at 360-664-2258, or via hard copy to the Department at the address at the bottom of this webpage, to the attention of Cindy Fazio. Cindy will respond to you that we have received the license waiver and logged it into our system. Because the form is declaratory in nature, that is all you need from us. Cindy will attach a courtesy copy in pdf format of the waiver you provided to us so you have a copy for your records or to forward to other parties. You can now provide the completed License Waiver to the escrow or title company or attorney. Do not provide any other loan documents to the Department.
  3. As to Item No. 1 in the License Waiver, access the links below to print, fill out and provide the applicable disclosure summary to the borrower. Do not provide the disclosure summary to the Department.

    Please note: You do not need a license waiver if you are carrying the financing on the sale of the home you live in. See the reference above to Interpretive Statement 2010-1 Revised. You do not need a license waiver if you are carrying the financing on raw land, even if that raw land is zoned residential.

Disclosure Summary Forms for use with License Waiver

Contact Us

If you have any questions about seller financing, please contact Cindy Fazio.

Phone: 360-902-8800
Toll Free: 1-877 RING DFI (746-4334)
Email: lfazio@dfi.wa.gov.

Mailing Address

For U.S. Postal Service:
Department of Financial Institutions
Attn: Cindy Fazio
Division of Consumer Services
PO Box 41200
Olympia WA 98504-1200
  For Overnight Delivery:
Department of Financial Institutions
Attn: Cindy Fazio
Division of Consumer Services
150 Israel Rd SW
Tumwater WA 98501

* This document is a PDF file, and you will need Adobe Acrobat Reader to view it. If you don't already have Acrobat Reader installed on your computer, you may download it for free from Adobe.