Residential Seller Financing

Financing the sale of residential real estate is regulated at both the state and federal levels. In Washington the Consumer Loan Act, chapter RCW 31.04 and chapter WAC 208-620, regulates the lending of money or extension of credit for family, personal, or household use. This includes financing residential mortgages. 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


  • Interpretive Statement 2010-1 Revised
    You may qualify for an outright exemption from the Consumer Loan Act. If you sell the home that was your primary residence and carry the financing for the sale, you are exempt from the Consumer Loan Act. You do not need a license or a license waiver.

    See: Interpretive Statement 2010-1

  • Rule Adopted to Implement License Waiver
    DFI has adopted a rule to implement the license waiver at RCW 31.04.025(3). The rule states:

    WAC 208-620-232 Can I make a small number of residential mortgage loans without being licensed at the company level?

    Pursuant to RCW 31.04.025(3) you may be eligible to make five or fewer residential mortgage loans during a calendar year without holding a company level license if you are not subject to licensing as a mortgage loan originator. See WAC 208-620-105. If you are eligible for the license waiver you must comply with the following conditions:

    (1) If you do not provide the borrower with a compliant federal disclosure of the loan terms and conditions and cost of financing you must provide the buyer with a disclosure prescribed by the director.

    (2) You must comply with the state's usury rate limit. See chapter RCW 19.52.

    (3) You must follow Washington law if you pursue a foreclosure.

License Waiver Steps

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.

Additionally, you do not need a license waiver if you are carrying the financing on raw land, even if that raw land is zoned residential. See RCW 31.04.025(2)(f).

  1. Print the License Waiver
  2. Fill out the license waiver, including the declaratory portion at the bottom, and return it to the Department via email to, 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. 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.

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)

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