Are there any circumstances under which a profit sharing plan can hold the mortgage of the son or daughter (not employees of the sponsor) of the company owner? Is there a residential loan program that allows such a loan in the plan?

Did you think through the prohibited transaction issues?

Yes I think I'm pretty much aware of the PT rules. I was trying to remember an old exemption for a loan program but I can't find anything about it - so maybe I dreamt it!