Which loan types are excluded from the 3 business day Loan Estimate requirement?

Which loan types are excluded from the 3 business day Loan Estimate requirement?

• A. Conventional fixed-rate loans
• B. HELOCs; HECMs; Chattels
• C. Jumbo loans
• D. FHA insured loans

Answer: (B)

The key idea is that the three-business-day Loan Estimate rule is part of TRID and applies to most closed-end mortgage loans secured by real property. However, some loan types are excluded from this requirement. Open-end lines of credit, such as home equity lines of credit, are excluded because they are not closed-end real estate transactions and use different disclosures. Reverse mortgages (HECMs) are also outside TRID’s Loan Estimate framework, since they are HUD-regulated. Loans secured by personal property (chattel) are not real estate loans, so TRID disclosures don’t apply. Therefore, those loan types are not bound by the three-day Loan Estimate requirement. By contrast, common real estate-financed loans like conventional fixed-rate loans, jumbo loans, and FHA insured loans generally fall under TRID and would require a Loan Estimate within the three business days after application.

The key idea is that the three-business-day Loan Estimate rule is part of TRID and applies to most closed-end mortgage loans secured by real property. However, some loan types are excluded from this requirement. Open-end lines of credit, such as home equity lines of credit, are excluded because they are not closed-end real estate transactions and use different disclosures. Reverse mortgages (HECMs) are also outside TRID’s Loan Estimate framework, since they are HUD-regulated. Loans secured by personal property (chattel) are not real estate loans, so TRID disclosures don’t apply.

Therefore, those loan types are not bound by the three-day Loan Estimate requirement. By contrast, common real estate-financed loans like conventional fixed-rate loans, jumbo loans, and FHA insured loans generally fall under TRID and would require a Loan Estimate within the three business days after application.