Yes, we believe it is possible to modify the terms of an existing HELOC before maturity to increase the loan limit, extend the maturity date, and change the interest rate from a variable rate to a fixed rate — provided the borrower signs a modification agreement reflecting these terms and they receive a notice of their right to rescind the increased credit limit.

Regulation Z permits creditors to make changes to the terms of a HELOC if the borrower agrees to the changes in writing. However, when the credit limit is increased, Regulation Z requires you to provide each consumer whose principal dwelling is security for the HELOC with notice of their right to rescind the increased credit limit. Model Form G-7 (linked in the resources below) is a rescission notice you may use when a borrower has agreed to an increased credit limit on an open-end credit account.

If you wait until after the HELOC has matured to make such changes, we believe a new plan would result, requiring you to provide new TRID disclosures. Additionally, we note that certain changes to a HELOC — such as adding a variable-rate feature to a fixed-rate plan (the opposite of your scenario) or changing the minimum payment requirement — also may trigger a requirement to provide new TRID disclosures, unless the information in your initial disclosures remains unchanged.

For resources related to our guidance, please see:

• Regulation Z, 12 CFR 1026.40(f)(3)(iii) (“Limitations on home equity plans. No creditor may, by contract or otherwise . . . Change any term, except that a creditor may . . . Make a specified change if the consumer specifically agrees to it in writing at that time.”)

• Regulation Z, Official Commentary, Paragraph 40(f)(3)(iii), Comment 1 (“A creditor may change the terms of a plan if the consumer expressly agrees in writing to the change at the time it is made. For example, a consumer and a creditor could agree in writing to change the repayment terms from interest-only payments to payments that reduce the principal balance. The provisions of any such agreement are governed by the limitations in § 1026.40(f). For example . . . a consumer could agree to a new credit limit for the plan, although the agreement could not permit the creditor to later change the credit limit except by a subsequent written agreement or in the circumstances described in § 1026.40(f)(3)(vi).”)

• Regulation Z, 12 CFR 1026.15(1)(i) (“Except as provided in paragraph (a)(1)(ii) of this section, in a credit plan in which a security interest is or will be retained or acquired in a consumer's principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind: each credit extension made under the plan; the plan when the plan is opened; a security interest when added or increased to secure an existing plan; and the increase when a credit limit on the plan is increased.”)

• Regulation Z, Appendix G to Part 1026, G-7 Rescission Model Form (When Increasing the Credit Limit)

• Regulation Z, Official Commentary, Paragraph 40, Comment 2 (“Section 1026.9(c) applies if, by written agreement under § 1026.40(f)(3)(iii), a creditor changes the terms of a home equity plan – entered into on or after November 7, 1989 – at or before its scheduled expiration, for example, by renewing a plan on different terms. A new plan results, however, if the plan is renewed (with or without changes to the terms) after the scheduled expiration. The new plan is subject to all open-end credit rules, including §§ 1026.6, 1026.15, and 1026.40.”)

• Regulation Z, 12 CFR 1026.9(c)(1)(i) (“For home-equity plans subject to the requirements of § 1026.40, whenever any term required to be disclosed under § 1026.6(a) is changed or the required minimum periodic payment is increased, the creditor shall mail or deliver written notice of the change to each consumer who may be affected. The notice shall be mailed or delivered at least 15 days prior to the effective date of the change. The 15-day timing requirement does not apply if the change has been agreed to by the consumer; the notice shall be given, however, before the effective date of the change.”)

• Regulation Z, Official Commentary, Paragraph 9(c)(1)(i), Comment 6 (”Section 1026.9(c)(1) applies when, by written agreement under § 1026.40(f)(3)(iii), a creditor changes the terms of a home-equity plan – entered into on or after November 7, 1989 – at or before its scheduled expiration, for example, by renewing a plan on terms different from those of the original plan. In disclosing the change:

i. If the index is changed, the maximum annual percentage rate is increased (to the limited extent permitted by § 1026.30), or a variable-rate feature is added to a fixed-rate plan, the creditor must include the disclosures required by § 1026.40(d)(12)(x) and (d)(12)(xi), unless these disclosures are unchanged from those given earlier.

ii. If the minimum payment requirement is changed, the creditor must include the disclosures required by § 1026.40(d)(5)(iii) (and, in variable-rate plans, the disclosures required by § 1026.40(d)(12)(x) and (d)(12)(xi)) unless the disclosures given earlier contained representative examples covering the new minimum payment requirement. (See the commentary to § 1026.40(d)(5)(iii), (d)(12)(x) and (d)(12)(xi) for a discussion of representative examples.)”)