HB 4166

relating to an exemption for certain property owners from
regulatory requirements for residential mortgage loan originators.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 156.2012(b), Finance Code, is amended to
(b)  To be eligible to register as a registered financial
services company, a person must:
(1)  be a depository institution exempt from this
chapter under Section 156.202(a-1)(5)(A) [156.202(a-1)(4)(A)] and
chartered and regulated by the Office of the Comptroller of the
Currency, or be a subsidiary of the institution;
(2)  provide a business plan satisfactory to the
commissioner that sets forth the person's plan to:
(A)  provide education to its sponsored
residential mortgage loan originators;
(B)  handle consumer complaints relating to its
sponsored residential mortgage loan originators; and
(C)  supervise the residential mortgage loan
origination activities of its sponsored residential mortgage loan
(3)  pay a registration fee in an amount not to exceed
(4)  designate an officer of the person to be
responsible for the activities of its sponsored residential
(5)  submit a completed application through the
Nationwide Mortgage Licensing System and Registry together with the
applicable fee required by Subdivision (3) or Subsection (c);
(6)  obtain preapproval from the commissioner that the
person meets the eligibility requirements for registration as a
financial services company; and
(7)  not be in violation of this chapter, a rule adopted
under this chapter, or any order previously issued by the
SECTION 2.  Section 156.202(a-1), Finance Code, is amended
(a-1)  The following entities are exempt from this chapter:
(A)  providing self-help housing that originates
zero interest residential mortgage loans for borrowers who have
provided part of the labor to construct the dwelling securing the
(B)  that has designation as a Section 501(c)(3)
organization by the Internal Revenue Service and originates
residential mortgage loans for borrowers who, through a self-help
program, have provided at least 200 labor hours or 65 percent of the
labor to construct the dwelling securing the loan;
(2)  a mortgage banker registered under Chapter 157;
(3)  subject to Subsection (b), any owner of
residential real estate who in any 12-consecutive-month period
makes no more than three residential mortgage loans to purchasers
of the property for all or part of the purchase price of the
residential real estate against which the mortgage is secured;
(4)  an owner of residential real estate who makes a
first lien mortgage loan to a purchaser of the property against
which the mortgage is secured, provided that all residential
mortgage loan origination activity in connection with the loan is
provided by a properly sponsored and authorized licensee who is
required to comply with the requirements of Chapter 180; and
(B)  a subsidiary of a depository institution that
(i)  owned and controlled by the depository
(ii)  regulated by a federal banking agency;
(C)  an institution regulated by the Farm Credit
SECTION 3.  Section 180.003(a), Finance Code, is amended to
(a)  The following persons are exempt from this chapter:
(1)  a registered mortgage loan originator when acting
for an entity described by Section 180.002(16)(A)(i), (ii), or
(2)  an individual who offers or negotiates terms of a
residential mortgage loan with or on behalf of an immediate family
(3)  a licensed attorney who negotiates the terms of a
residential mortgage loan on behalf of a client as an ancillary
matter to the attorney's representation of the client, unless the
(A)  takes a residential mortgage loan
(B)  offers or negotiates the terms of a
(4)  an individual who offers or negotiates terms of a
residential mortgage loan secured by a dwelling that serves as the
(5)  subject to Subsection (d), an owner of residential
real estate who in any 12-consecutive-month period makes no more
than three residential mortgage loans to purchasers of the property
for all or part of the purchase price of the residential real estate
against which the mortgage is secured; [and]
(6)  subject to Subsection (d), an owner of a dwelling
who in any 12-consecutive-month period makes no more than three
residential mortgage loans to purchasers of the property for all or
part of the purchase price of the dwelling against which the
mortgage or security interest is secured; and
(7)  an owner of residential real estate who makes a
first lien mortgage loan to a purchaser of the property against
which the mortgage is secured, provided that all residential
mortgage loan origination activity in connection with the loan is
provided by a properly sponsored and authorized licensee who is
required to comply with the requirements of this chapter.
SECTION 4.  This Act takes effect September 1, 2025.