No, we do not believe that the phrase “low downpayment” in an advertisement for mortgage loans would trigger the additional advertising disclosures required under Regulation Z.

Regulation Z requires additional disclosures to be provided with advertisements that include trigger terms such as “the amount or percentage of any downpayment.” However, the definition of “downpayment” is very narrow — it is limited to credit sale transactions. As confirmed in the Official Interpretations for Regulation Z, advertising the amount or percentage of a downpayment is a trigger term only in the context of a credit sale (“this triggering term is limited to credit sale transactions”). A “credit sale” means a sale in which the seller is a creditor, which is not the case here. Consequently, your advertisement’s use of the word “downpayment” does not meet the Regulation Z definition and would not be considered a trigger term.

Additionally, even in the context of a credit sale, we do not believe that the phrase “low downpayment” would be a trigger term. Regulation Z’s Official Interpretations clarify that the mention of a downpayment is a trigger term only when referencing the downpayment as a “dollar amount” or “as a percentage of the price.” In our view, use of the term “low downpayment” by itself does not meet those criteria and thus should not trigger additional disclosures.

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.24(d)(1) (“Triggering terms. If any of the following terms is set forth in an advertisement, the advertisement shall meet the requirements of paragraph (d)(2) of this section: (i) The amount or percentage of any downpayment. (ii) The number of payments or period of repayment. (iii) The amount of any payment. (iv) The amount of any finance charge.”)

• Regulation Z, 12 CFR 1026.2(18) (“Downpayment means an amount, including the value of property used as a trade-in, paid to a seller to reduce the cash price of goods or services purchased in a credit sale transaction.”)

• Regulation Z, 12 CFR 1026.2(16) (“Credit sale means a sale in which the seller is a creditor. . . .”)

• Official Interpretation, Regulation Z, Paragraph 24(d)(1), Comment 1(i) (“. . . By virtue of the definition of downpayment in § 1026.2, this triggering term is limited to credit sale transactions.”)

• Official Interpretation, Regulation Z, Paragraph 24(d)(1), Comment 1(i) (“The dollar amount of a downpayment or a statement of the downpayment as a percentage of the price requires further information. . . . It includes such statements as: A. Only 5% down. B. As low as $100 down. C. Total move-in costs of $800.”)