What Types of Loans are Covered (or Not Covered) by TRID?

The new TILA-RESPA Integrated Disclosures (TRID) were created with the intention of simplifying the borrowing process for homebuyers by reducing the amount of paperwork and providing more lead time for consumers to review the terms of their loans prior to closing.

The TILA-RESPA rule applies to most closed-end loans secured by real property., there are some loans that are not covered under the new rule, which means consumers obtaining these loan products will not receive the new Integrated Disclosures. Those products include:

Reverse mortgages
Home Equity Lines of Credit (HELOCs)
Chattel-dwelling loans, such as loans secured by a mobile home or by a dwelling that is not attached to real property (land)
Loans made by a person or entity that makes five or fewer mortgages in a calendar year and isn’t a creditor

There is also a partial exemption for certain transactions associated with housing assistance loan programs for low- and moderate-income consumers.

Things get a little trickier when looking at certain types of loans that are currently subject to TILA but not RESPA, but are subject to the TILA-RESPA rule’s integrated disclosure requirements, including:

Construction-only loans
Loans secured by vacant land or by 25 or more acres

Lenders must continue to use (as applicable) the Good Faith Estimate (GFE), HUD-1 and Truth-in-Lending disclosures. While lenders are not prohibited from using the Integrated Disclosure forms on loans that are not covered by TILA or RESPA, they cannot use the new Integrated Disclosure forms instead of the GFE, HUD-1, and Truth-in-Lending forms for transactions that are covered by TILA or RESPA that require those disclosure forms. You may still see a HUD-1 in your future, but on a much more limited basis.

If your clients need clarification on whether or not they should receive the new TRID forms, they should contact us. As always, we are here to help you and your clients get deals done.

Some of the guidance in this article was based on the CFPB Compliance Guide.

Deborah Kearns is an award-winning writer based in Denver with more than a decade of experience in corporate communications and news journalism. She has covered the real estate industry for more than seven years.