NC Mobile home Interest Rate ???

Question

What rates are yall using in North Carolina when you sell Mobile homes (Lonnie deals)?I'm trying to understand the NC general statutes regarding setting Mobile Home interest rates. I think I understand, but my interpretation is the highest rate i could set based on GS 24-1.1(c) is 6% higher than the 6 month T-bill. Currently that would mean I could charge about 6% interest right now. Kinda seems low for mobile home investing. Curious what everyone else is charging in NC.

Randy Rodenhouse · Answer

First, remember there has been some recent changes in the law for selling on owner financing and contract for deed.

In a nutshell.. as of October 1, 2010, in NC (please seek a competent attorney to make sure I am correct, this is my interpretation)

WRT Lease Options, the new law:
•	Requires that contracts be filed on the public record, including the name and signatures of all parties along with a description of the property;
•	Applies the state’s landlord tenant law to the lease portion of these agreements; and
•	Gives renters the option to cancel lease option contracts if default occurs on the mortgage, and seek a refund for all money paid less the fair rental value of the property.

WRT Contract for deeds, the new law:
•	Prohibits sellers who don’t hold title and are not on the mortgage from selling property under a contract for deed.  You must hold title and be on the mortgage.  Even if this nis the case there are rules to follow as described in the link above.  Again verify with an attorney.
•	Requires certain specific disclosures in the contract, including whether there is a mortgage or any other liens on the property;
•	Requires the contracts to be filed on the public record;
•	Gives buyers the right to resolve a default after being notified of it; and
•	Provides buyers with a statement of accounts every twelve months.

North Carolina does not have the clearest of laws when it comes to interest rates. I know that for personal loans there appears to be some conflict in the law (see below if interested)

There is one provision in the statutes of North Carolina that provide that the general usury rate on personal loans be limited at 8%. While this provision does seem fairly clear on the surface, there is another provision in the statutes of North Carolina that deal with usury limits.

Under this second provision in the North Carolina statutes, there is a provision that establishes a usury limit at a variable level. This provision sets forth that the usury limit on personal loans at 16% or the T-Bill rate set for non-competitive T-Bills.

In addition to all of these provisions about usury limits, the statutes of North Carolina actually set no usury limitations specifically for personal loans that are above $25,000.

Pretty confusing I know. The bottom line is that if a person wants to make certain that he or she is in compliance with applicable usury laws in North Carolina, the safest course is to keep interest rates on personal loans at 8% or less.

Because there are so many variations when it comes to usury laws in North Carolina, you really need to seek out legal advice and assistance.