Non-Arm’s Length Transaction Home Loans

An Arm’s Length Transaction refers to a real estate purchase transaction in which both the buyer and seller are conducting business from an equal bargaining position, with neither party having any control or influence over the other.  In contrast, a Non-Arm’s Length Transaction is a purchase transaction in which there exists a business or familial relationship between the buyer and seller of a property.

Examples of  Non-Arm’s Length Transactions:

  • Buying or a home that is being sold by an immediate family member
  • Buying a home where the buyer previously short-sold the same property
  • Buying a home that is has been built by or sold by your employer
  • Buying a home that is being listed by a real estate agent that is your relative

Mortgage bank guidelines vary for Non-Arm’s Length Transactions.  Some banks will simply not provide funding for any of these transactions, while others will only provide funding if the transaction is being purchased as owner-occupied or a second home.

If you are involved in a Non-Arm Length Transaction, be sure to notify your loan officer as quickly as possible.  Ever since the mortgage meltdown, lenders have invested millions of dollars on complex background search technology that looks to identify relationships between the parties in a given transaction.

The Home Point’s Team has access to multiple investors that provide purchase financing for owner-occupied, second home, and investment properties that are considered to be Non-Arm’s Length Transactions.


Incredible Turnaround and Stellar Customer Service. Chad and his team helped us get into our first home here in San Diego. When we first started the process we were skeptical it would even be worth applying. But Chad and his team walked us through the whole lending process with integrity and know how that surpassed our expectations. After helping us to pull together our pre-qualification, he and his team stayed at the ready. Before we even walked up to a home we were seriously interested in he had the data we needed over to us and our realtor. After finding the home we wanted to place a bid on, we were able to place a bid with a matter of a few hours. Then, after having our offer accepted, he had our loan package completed and the keys in our hands in under a month — I am pretty sure it was less than. Like I said, incredibly fast and professional turnaround. if you are looking for a motivated lender who can walk you though every detail and have your back every step of the way, Chad and his team at HomePoint Financial is your best decision. Recommend them highly!”

“Chad Baker is THE BEST, most professional, understanding, HONEST person I’ve ever worked in the mortgage industry. He knows exactly what he’s talking about, will never promise something he can’t deliver, and will bend over backwards to get you what you need. I had a very unique problem qualifying and every other mortgage company I worked with assured me from the beginning that they could get me financed, and then it would all fall apart once we hit underwriting. Chad understood my circumstance from the beginning and patiently explained every step of the way. I can’t thank you enough Chad! Juliann has been great keeping me updated and making sure that everything comes together in a timely fashion. She also appreciates my sense of humor, which gives personality to a boring funding process. Thanks Juliann! I HIGHLY recommend Home Point and if I ever buy another home, will absolutely use them again.”

A very responsible and experienced professional with his highly effective team

I really enjoyed working with Chad Baker and the rest of the team. This was our first time buying a home in California and we started with unnecessary assumptions based on our previous experience as home-owners in a different state. Chad and his team were available throughout the whole process, explaining the state differences, answering all our phone calls and emails quickly and directly, and providing detailed weekly status reports so that all parties including agents knew exactly where we were in the process. Chad was very experienced and provided customized loan products for us to consider, which definitely facilitated our transaction. I recommend the Chad Baker team! ”

I hope you enjoyed reading this article. It's my goal to keep you updated with the latest real estate mortgage news. I'm proud to provide you with 100% original and unique content. Subscribe now to get high quality real estate mortgage content and articles delivered directly to your inbox. Chad Baker is Regional Manager for Cross Country Mortgage. Chad is consistently recognized in the top 1% of mortgage originators in the United States 2011-2019. Got a question for Chad? Call (858) 353-8331 or submit your question online