Reply To: HPCT vs. HPML


You’ll look to the scope of 1026.43 to determine what transactions are covered. But, yes, typically a dwelling secured loan is covered unless one of the exemptions apply (Some exemptions include: HELOCs, loans secured by time share, reverse mortgage, temporary/bridge loans, construction phase of 12mths or less of constr./perm, and others you can find here:

If you have a loan secured by a principal dwelling that exceeds the APOR by 2.10% and you have qualified it under the Small Creditor QM option then it would not be HPCT since it does not meet/exceed the 3.5% threshold; so you would receive the QM Safe Harbor. However, since it is a closed end, principal dwelling secured transaction that does exceed the 1.5% HPML threshold for 1st lien transactions then it would be an HPML and you would need to comply with the HPML requirements including the escrow and appraisal rules unless one of the exemptions to those specific rules applies. (You can find the HPML rules and exemption here: