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HF1865 (Legislative Session 94 (2025-2026))

Loans that satisfy the federal qualified mortgage points and fees threshold excluded from the definition of conventional loan.

Related bill: SF2296

AI Generated Summary

This bill, introduced in the Minnesota House of Representatives during the Ninety-Fourth Session (2025), seeks to amend Minnesota Statutes 2024, section 47.20, subdivision 2, regarding the definition of a "conventional loan."

Key Provisions:

  1. Exclusion of Certain Loans from "Conventional Loans" Definition

    • The bill excludes loans that satisfy the federal qualified mortgage points and fees threshold from being classified as "conventional loans."
    • This means that loans where the points and fees charged to the borrower do not exceed the limits set forth in 12 CFR § 1026.43(e)(3) will not be considered conventional loans.

  2. Clarification of Other Definitions Related to Loans

    • The bill also defines or clarifies terms related to real estate loans, including:
      • Actual Closing Costs (e.g., insurance, title fees, appraisal fees)
      • Contracts for Deed (i.e., seller-financed property sales under $300,000)
      • Cooperative Apartment Loans
      • Finance Charges (including interest and lender fees)
      • Loan Yield Calculation
      • Definitions of Lender, Borrower, Vendor, and Residential Unit

Impact of the Bill:

  • The bill is likely intended to align Minnesota state law with federal mortgage standards regarding loan fees and lending practices.
  • By excluding qualified mortgages with limited points and fees from being considered conventional loans, the bill may encourage more lenders to offer these types of loans without classifying them under stricter conventional loan regulations.
  • This could increase consumer access to loans that meet federal standards for affordability and fees.

Legislative Process:

  • The bill was authored by Representatives Allen, Cha, Rymer, and Perryman.
  • It was read for the first time on March 5, 2025, and referred to the Committee on Commerce Finance and Policy for further review.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
March 04, 2025HouseFloorActionIntroduction and first reading, referred toCommerce Finance and Policy
March 16, 2025HouseFloorActionCommittee report, to adopt as amended
March 16, 2025HouseFloorActionSecond reading

Citations

 
[
  {
    "analysis": {
      "added": [
        "Clarification of definitions related to 'actual closing costs' and 'conventional loans'."
      ],
      "removed": [
        "Specific references or conditions previously included in the conventional loan definition under certain clauses."
      ],
      "summary": "The bill modifies the definition of conventional loans under section 47.20, subdivision 2, excluding loans meeting the federal qualified mortgage points and fees threshold.",
      "modified": [
        "Updated the terminology and criteria for qualifying loan characteristics."
      ]
    },
    "citation": "47.20"
  },
  {
    "analysis": {
      "added": [
        "Details on cooperative apartment loans exceptions."
      ],
      "removed": [
        "Details about certain borrower-lender obligations previously cited."
      ],
      "summary": "Referencing exceptions for loans secured by a mortgage upon real property under section 334.011.",
      "modified": [
        "Adjustment in condition application for loans under specified conditions."
      ]
    },
    "citation": "334.011"
  },
  {
    "analysis": {
      "added": [
        "Provisions concerning borrower or forward commitments for loans."
      ],
      "removed": [
        "Restrictions on previous financial or loan structures already outlined."
      ],
      "summary": "References arrangements with respect to commitments on units created under chapter 515B.",
      "modified": [
        "Clarification in the issuance of forward commitments and their relevance."
      ]
    },
    "citation": "515B"
  }
]

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