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Does the Home Ownership and Equity Protection Act (HOEPA) apply to FHA Title 1 loans, even though they are government secured? – IBA Compliance Connection

IBA Compliance Connection

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Does the Home Ownership and Equity Protection Act (HOEPA) apply to FHA Title 1 loans, even though they are government secured?

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We are not aware of any laws or regulations that exempt federally-secured loans from HOEPA’s requirements. In general, the Truth in Lending Act (TILA) applies to loans that are: (1) closed-end credit, (2) secured by the borrower’s principal dwelling, (3) not purchase-money loans, (4) not reverse mortgage loans, and (5) primarily for personal, family, or household purposes. 12 CFR 1026.32(a)(2). If the loan’s annual percentage rate exceeds the relevant Treasury Constant Maturities Yield by eight-percent (for first-lien loans) or by ten-percent (for subordinate-lien loans), or if the total points and fees on the loan exceed the greater of eight-percent of the total loan amount or $400 (an annually-adjusted figure), then the loan is subject to HOEPA’s requirements and restrictions. 15 USC 1602(aa), 1639.