When you’re creating owner-financed notes, there’s one step that separates professional, compliant lenders from everyone else: using an RMLO — a Residential Mortgage Loan Originator.

At Blades Capital, every new loan we originate is reviewed and underwritten by a licensed RMLO. It’s a crucial part of protecting our investors, keeping our notes federally compliant, and making sure every deal remains sellable in the future.

Here’s why it matters.

What is an RMLO?

An RMLO (Residential Mortgage Loan Originator) is a licensed professional who reviews loan applications, verifies borrower information, and ensures that every loan complies with federal lending laws — especially the Dodd-Frank Act and SAFE Act.

In short: an RMLO is the gatekeeper that confirms the borrower’s ability to repay and that the loan terms are fair and transparent.

Why compliance matters — especially for owner-financed deals

Owner financing creates powerful opportunities for investors, but it also sits under specific federal regulations. The Dodd-Frank Act requires that most seller-financed loans be originated through an RMLO to protect the borrower’s rights.

Without an RMLO review you risk non-compliance with federal law. Your note could become non-sellable on the secondary market and you could even face challenges or legal exposure if the borrower defaults and a dispute arises.

By using an RMLO, we stay 100% compliant and transparent. Every borrower file includes income verification, credit review, and full documentation that the loan was originated properly.

How this protects our investors

Using an RMLO isn’t just about checking boxes — it directly protects the investors who fund our deals.

Here’s how:

Future sellability: A properly underwritten, compliant note is sellable.

KEY POINT

One of the most common question our investors ask is "What if i need my money back?" Well, when we have nice clean paper it is easy for us to sell to a large note buyer. For example if our lender is owed $100,000 and our end buyer owes Blades Capital $150,000 we have the option to sell that note and pay our investor. We would expect to sell a note like this for somewhere between $120k and $130k. This would pay back our investor as well as pay a nice profit to Blades Capital. If we ever choose to sell the note or recapitalize part of our portfolio, those notes meet all the standards secondary buyers look for.

Defensible underwriting: If a borrower defaults, you have a clear record showing the loan met federal and state guidelines. That reduces legal risk and protects investor capital.

Consistent processes: Each loan goes through the same underwriting flow — credit analysis, income documentation, disclosures, and compliance checks — meaning your investment sits inside a disciplined, repeatable system.

Better borrower performance: Because borrowers are vetted for ability-to-repay, our default rates stay low and payments stay consistent.

What the process looks like at Blades Capital

When we originate a new owner-financed deal, here’s the step-by-step process:

Borrower applies through our online form (via OwnerCarryKansas.com ).

We gather documentation: income, employment, and credit history.

RMLO review: A licensed Residential Mortgage Loan Originator reviews the file, ensures compliance with Dodd-Frank, and issues a compliance package.

Note creation: Once approved, we draft the promissory note or contract for deed based on the RMLO’s recommendations.

Funding: Investors fund the note knowing the loan is compliant, well-documented, and backed by real property.

This structure ensures each note can be held for yield or sold in the future with minimal friction.

Why sellability matters to investors

Even if your goal is to hold the note for income, life and markets change. The ability to sell your note quickly — and at the highest value — is a powerful safety net.

Notes that are compliant, documented, and RMLO-originated trade at higher premiums because institutional and private buyers know the risk has been professionally mitigated.

Final thoughts

In real estate investing, compliance isn’t optional — it’s part of protecting your returns.

By using an RMLO on every owner-financed loan, Blades Capital ensures:

Every deal is federally compliant.

Every note is professionally underwritten.

Every investor’s position is defensible and potentially liquid.

That’s how we maintain consistent, predictable performance across our entire portfolio — and how we keep your investment safe.