[Kristin]

We have a down payment assistance loan done through Ohio Housing Finance Agency (OHFA). This is a pre-TRID loan secured by a second mortgage at a 0% interest rate.

I am not finding anything in Reg Z exempting a 0% loan from the TIL requirement, yet OHFA feels that they are not required to provide a TIL since it is a 0% loan. Any insight on whether or not this is required?

[rcooper]

Reg Z 1026.1(c) states: Coverage. (1) In general, this part applies to each individual or business that offers or extends credit, other than a person excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat. 1376, when four conditions are met:

(i) The credit is offered or extended to consumers;

(ii) The offering or extension of credit is done regularly;

(iii) The credit is subject to a finance charge or is payable by a written agreement in more than four installments; and

(iv) The credit is primarily for personal, family, or household purposes.

Does the transaction you mention meet all four criteria? I am assuming it does based on your comments?

Or perhaps they are thinking about the language that was effective on Oct. 3, 2015 in 1026.3(h) which excludes certain mortgage transactions from the integrated disclosure requirements if a whole list of requirements are met, one of which is no interest charged (I don’t believe this is the case since you said this was a pre-TRID application). If you believe this is what they are referring to then I recommend a good reading of that section of Reg Z and its commentary.

If the transaction meets the coverage requirements and does not meet one of the exclusions then I agree Reg Z would apply.

[Author]

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