HF1865

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.