Here are the guidelines for those who plan to sell only one property in a 12 month period.
1. The natural person, estate, or trust provides seller financing for the sale of only one property in any 12-month period to purchasers of such property, which is owned by the natural person, estate or trust and serves as security for the financing. A natural person is in an individual; it is not an entity like an LLC, S-Corp, Partnership, etc.
2. The natural person, estate or trust has not constructed, or acted as a contractor for the construction, of a residence on the property in the ordinary course of business of the person.
3. The natural person, estate or trust provides seller financing that meets the following requirements:
a) The financing has a repayment schedule that does not result in negative amortization. (A balloon payment is permitted),
b) The financing has a fixed rate or an adjustable rate that is adjustable after five or more years, subject to reasonable annual and lifetime limitations on interest rate increases and provides for the rate to be determined by the addition of a margin to an index rate based on a widely available index such as US Treasury or LIBOR. An annual rate increase of up to two percent with a lifetime cap of 6 points is considered reasonable
c) The seller does not have to determine if the buyer has a reasonable ability to repay.