What types of loans are excluded from HPMLs?

Asked by: Friedrich Trantow  |  Last update: August 12, 2025
Score: 4.9/5 (15 votes)

Which loans are exempt from HPML requirements?
  • Construction loans.
  • Rural and underserved areas.
  • Planned unit development or condo association insurance.

What loans are exempt from HPML?

The supplemental final rule provides the following additional exemptions from the requirements of the HPML Appraisal Rule: Loans for $25,000 or less, indexed every year for inflation; Streamlined refinance loans, where the owner or guarantor of the existing obligation remains the same on the refinancing 8; and.

How do you determine if a loan is HPML?

Your mortgage will be considered a higher-priced mortgage loan (HPML) if the APR is a certain percentage higher than the APOR, depending on what type of loan you have: First-lien mortgages: If your mortgage is a first-lien mortgage, the lender of this mortgage will be the first to be paid if you go into foreclosure.

What loans are subject to HPML?

What Loans are Covered? The HPML Appraisal Rule applies to first-lien or subordinate-lien HPMLs that are closed-end and secured by the consumer's principal dwelling.

What loans are excluded from forgiveness?

What student loans are not eligible for forgiveness? Private student loans, by definition, are private and are not eligible to be forgiven.

HPMLs - Higher Priced & Higher Cost Mortgage Loans

35 related questions found

What type of loan qualifies for loan forgiveness?

Only federal Direct Loans can be forgiven through PSLF. If you have other federal student loans such as Federal Family Education Loans (FFEL) or Perkins Loans you may be able to qualify for PSLF by consolidating into a new federal Direct Consolidation Loan.

Who is ineligible for loan forgiveness?

You must be a direct employee of a qualifying employer for your employment to qualify. This means that employees of contracted organizations, that are not themselves a qualifying employer, won't qualify for PSLF including government contractors and for-profit organizations.

How to avoid HPML?

There are five key ways to avoid an HPML loan:
  1. Don't take out an FHA loan.
  2. Boost your credit scores so you qualify for a conventional loan.
  3. Make a bigger down payment.
  4. Ask the seller to pay closing costs.
  5. Buy a site-built home.

Does HPML apply to lot loans?

"(1) "Higher-priced mortgage loan" means a closed-end consumer credit transaction secured by the consumer's principal dwelling ...." A lot loan does not include a dwelling. Therefore it cannot be an HPML.

Are HELOCs excluded from HPML?

Therefore, if it is a HELOC, it's exempt from HPML as Dan said. Sec. 226.5b Requirements for home equity plans.

Are bridge loans exempt from HPML?

I see that temporary loans and bridge loans -12 months or less (loans that will be satisfied and replaced with permanent financing) are not subject to HPML. I believe temporary and short term loans are subject to HOEPA though. Answer: That is correct.

How to figure HPML?

For first liens, add 1.5 % to the listed index if the loan was locked in (or re-locked) during the week following the date. For example, if your APR is 7.09 and you subtract 1.5 your answer is 5.59. If your answer is higher than the posted index, which is currently 5.09 your loan is classified as an HPML.

Is a reverse mortgage excluded from HPML?

If your organization is eligible for the small creditors exemption or the insured institution exemption, but you originate an HPML under a forward commitment for sale (i.e.,your organization will not hold the loan in portfolio), you must establish an escrow account unless the loan is otherwise exempt (for example, it ...

What loans are not subject to HOEPA?

Loans Exempt from HOEPA Coverage
  • Reverse mortgages.
  • Construction Loans (applies to only the initial construction of a new dwelling)
  • Loans originated and directly financed by Housing Finance Agency (HFA)
  • Loans originated under the U.S. Department of Agriculture (USDA's) Rural Development Loan Program.

What is an exempt loan?

An Exempt Loan includes a direct loan of cash, a purchase-money transaction, and an assumption of an obligation of a tax-qualified employee stock ownership plan under Section 4975(e)(7) of the Code (“ESOP”).

Can a construction loan be HPML?

Answer: HPML applies to a construction permanent loan, but not a construction only loan.

What is the HPML rule for FHA loans?

HPMLs are loans secured by consumer's principal dwelling with an annual percentage rate (APR) exceeding the average prime offer rate (APOR)1 by: 1.5% or more on first lien mortgage which is a non-jumbo, non-FHA loan. 2.5% or more on first lien mortgage which is a jumbo loan. 3.5% on loans secured by second lien.

What type of loan is a lot loan?

A land loan is a type of credit used to finance the purchase of a plot of land. It's sometimes called a lot loan. These are important because, for many, owning a piece of land is the first step toward building a dream home or launching a business venture.

What is the difference between HPML and HPCT?

The big difference is HPML is principal dwelling secured and HPCT is dwelling secured. In addition, there is an additional threshold for jumbo HPMLs. So, just because one applies won't always mean that both apply.

Which threshold are HPMLs identified using?

From January 1, 2022, through December 31, 2022, the threshold amount is $28,500. 4. Qualifying for exemption—in general. A transaction is exempt under §34.203(b)(2) if the creditor makes an extension of credit at consummation that is equal to or below the threshold amount in effect at the time of consummation.

Which of the following is not a characteristic of an HPML?

The answer is it has an APR that exceeds the rate for Treasury securities with a comparable rate of maturity by 6.5 percentage points. Having an APR that exceeds the rate for Treasury securities with a comparable rate of maturity by 6.5 percentage points is not a characteristic of an HPML.

What types of loans are not subject to regulation Z?

Certain types of loans are not subject to Regulation Z, including federal student loans, loans for business, commercial, agricultural, or organizational use, loans above a certain amount, loans for public utility services, and securities or commodities offered by the Securities and Exchange Commission.

What loans don t qualify for forgiveness?

At the federal level, some government-backed student loans also don't qualify for forgiveness, including:
  • Federal Family Education Loan (FFEL)
  • Federal Perkins Loan.

When using the 50/30/20 rule to budget, what category are loan payments in?

The 50/30/20 rule can make budgeting easier. The rule allocates 50% of your take-home pay to needs, 30% to wants, and 20% to savings. Debt payments are technically in the savings bucket. You'll need to decide how to split that 20% between debt payments above the minimums and cash savings.

Which loans are not eligible for PSLF?

What loans can be forgiven? Only Direct Loan Program loans that are not in default are eligible for PSLF and TEPSLF. Loans you received under the Federal Family Education Loan (FFEL) Program, the Federal Perkins Loan (Perkins Loan) Program, or any other student loan program are not eligible for PSLF.