A student asks: May an Alaska Real Estate Broker provide a loan to a home buyer?

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May an Alaska Real Estate Broker provide a loan to a buyer of a home?

I would be the selling Broker as well as an owner within the LLC providing the loan. Would this loan by a Broker be acceptable? Thank you,

Short answer is: It depends.

The key consideration is what type of financing is being provided and by whom? Some types of financing allow gifts from the real estate licensees but not loans. Others may allow the seller to carry back some of their equity in a note and deed of trust or mortgage. What is important, to avoid potential violation of license law or mortgage fraud, is the full disclosure and agreement by the lending entity, mortgage lender, or secondary market if the loan is to be sold.

In this particular situation you are wearing 2 hats, both licensee and principle. The rules and restrictions to these 2 types of entities can be different. As an example, if the seller/principle was selling using owner financing but the brokerage was providing an additional loan in a second position, or first for that matter, disclosure would still be necessary, but rules and restriction may not be an issue.

Hope this helps,


Jerry Royse, at the helm of Royse and Associates, stands out in real estate education with over 35 years of experience teaching across 46 states and 5 countries. A seasoned educator, Jerry has trained thousands in Sales Pre-Licensing and Continuing Education, also applying his expertise as an expert witness in over 30 legal cases and successfully closing over 1100 homes as a Buyer Broker. His extensive knowledge marks him as a preeminent expert in the field.

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