While there is some indication that HELOC proceeds may be used to purchase a home, we have never encountered such a situation. The federal commentary on the right to rescission acknowledges that residential mortgage transactions are made on open-end credit plans, while noting that this practice is seldom used. Comment 1, Official Staff Commentary, 12 CFR 1026.15(f). All disclosures under Regulation Z for purchase money transactions would have to be made, along with any additional disclosures required for HELOCs. We note that there may be some fair lending risk, considering that HELOCs tend to have higher and/or adjustable interest rates, and thus you should have policies and procedures in place to prevent steering customers in protected classes towards a HELOC rather than a traditional mortgage.