Warning

• Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, a home seller can't offer owner financing on a property if he sells more than three properties in a 12 month period, unless he receives licensing as a mortgage originator. The U.S. Department of Housing and Urban Development establishes the rules under this act, and they are subject to change. As of October 2011, the New Hampshire legislature is considering a bill to exclude private owners from these rules.
  
  

Interest

• New Hampshire doesn't establish usury laws for written contracts, so home sellers can charge any rate the buyer agrees to pay. They may charge simple or compound interest on the loan. "Compound interest" refers to a loan in which the owner can charge additional interest on interest owed. Simple interest refers to the principle times the interest rate times the number of years of the owner-financed loan.
  
  

Limits

• If a New Hampshire homeowner doesn't create a written finance agreement when he sells the property, he can only charge the maximum legal interest rate of 10 percent. He may only charge simple interest on the loan and can't charge compound interest on a verbal loan, per Section 336:1 of the NHGSA. Regardless of whether a finance contract takes written or verbal form, the seller can't collect interest in advance from a home buyer.
  
  

Disclosure

• Home sellers must provide full disclosure of home loan terms under the Truth-in-Lending Act. For land sales, New Hampshire requires sellers of property that will carry owner financing to disclose to the buyer any environmental damage to the land and to disclose any interests in the land at the time of sale, such as rights of way, hunting rights, and oil and mineral leases.