C.F.R. » Title 12 » CHAPTER X—CONSUMER FINANCIAL PROTECTION BUREAU › PART 1024—REAL ESTATE SETTLEMENT PROCEDURES ACT (REGULATION X) › Subpart A—General Provisions

12 C.F.R. § 1024.5

Coverage of RESPA

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(a) Applicability. RESPA and this part apply to federally related mortgage loans, except as provided in paragraphs (b) and (d) of this section.

(b) Exemptions. (1) [Reserved]

(2) Business purpose loans. An extension of credit primarily for a business, commercial, or agricultural purpose, as defined by 12 CFR 1026.3(a)(1) of Regulation Z. Persons may rely on Regulation Z in determining whether the exemption applies.

(3) Temporary financing. Temporary financing, such as a construction loan. The exemption for temporary financing does not apply to a loan made to finance construction of 1- to 4-family residential property if the loan is used as, or may be converted to, permanent financing by the same lender or is used to finance transfer of title to the first user. If a lender issues a commitment for permanent financing, with or without conditions, the loan is covered by this part. Any construction loan for new or rehabilitated 1- to 4-family residential property, other than a loan to a bona fide builder (a person who regularly constructs 1- to 4-family residential structures for sale or lease), is subject to this part if its term is for two years or more. A “bridge loan” or “swing loan” in which a lender takes a security interest in otherwise covered 1- to 4-family residential property is not covered by RESPA and this part.

(4) Vacant land. Any loan secured by vacant or unimproved property, unless within two years from the date of the settlement of the loan, a structure or a manufactured home will be constructed or placed on the real property using the loan proceeds. If a loan for a structure or manufactured home to be placed on vacant or unimproved property will be secured by a lien on that property, the transaction is covered by this part.

(5) Assumption without lender approval. Any assumption in which the lender does not have the right expressly to approve a subsequent person as the borrower on an existing federally related mortgage loan. Any assumption in which the lender's permission is both required and obtained is covered by RESPA and this part, whether or not the lender charges a fee for the assumption.

(6) Loan conversions. Any conversion of a federally related mortgage loan to different terms that are consistent with provisions of the original mortgage instrument, as long as a new note is not required, even if the lender charges an additional fee for the conversion.

(7) Secondary market transactions. A bona fide transfer of a loan obligation in the secondary market is not covered by RESPA and this part, except with respect to RESPA (12 U.S.C. 2605) and subpart C of this part (§§ 1024.30-1024.41). In determining what constitutes a bona fide transfer, the Bureau will consider the real source of funding and the real interest of the funding lender. Mortgage broker transactions that are table-funded are not secondary market transactions. Neither the creation of a dealer loan or dealer consumer credit contract, nor the first assignment of such loan or contract to a lender, is a secondary market transaction (see § 1024.2).

(c) Relation to State laws. (1) State laws that are inconsistent with RESPA or this part are preempted to the extent of the inconsistency. However, RESPA and these regulations do not annul, alter, affect, or exempt any person subject to their provisions from complying with the laws of any State with respect to settlement practices, except to the extent of the inconsistency.

(2) Upon request by any person, the Bureau is authorized to determine if inconsistencies with State law exist; in doing so, the Bureau shall consult with appropriate Federal agencies.

(i) The Bureau may not determine that a State law or regulation is inconsistent with any provision of RESPA or this part, if the Bureau determines that such law or regulation gives greater protection to the consumer.

(ii) In determining whether provisions of State law or regulations concerning affiliated business arrangements are inconsistent with RESPA or this part, the Bureau may not construe those provisions that impose more stringent limitations on affiliated business arrangements as inconsistent with RESPA so long as they give more protection to consumers and/or competition.

(3) Any person may request the Bureau to determine whether an inconsistency exists by submitting to the address established by the Bureau to request an official interpretation, a copy of the State law in question, any other law or judicial or administrative opinion that implements, interprets or applies the relevant provision, and an explanation of the possible inconsistency. A determination by the Bureau that an inconsistency with State law exists will be made by publication of a notice in the Federal Register. “Law” as used in this section includes regulations and any enactment which has the force and effect of law and is issued by a State or any political subdivision of a State.

(4) A specific preemption of conflicting State laws regarding notices and disclosures of mortgage servicing transfers is set forth in § 1024.33(d).

(d) Partial exemptions for certain mortgage loans. Sections 1024.6, 1024.7, 1024.8, 1024.10, and 1024.33(a) do not apply to a federally related mortgage loan:

(1) That is subject to the special disclosure requirements for certain consumer credit transactions secured by real property set forth in Regulation Z, 12 CFR 1026.19(e), (f), and (g); or

(2) That satisfies the criteria in Regulation Z, 12 CFR 1026.3(h).

[76 FR 78981, Dec. 20, 2011, as amended at 78 FR 10874, Feb. 14, 2013; 78 FR 44717, July 24, 2013; 78 FR 80104, Dec. 31, 2013; 80 FR 8775, Feb. 19, 2015]
Notes of Decisions
Cited in 18 cases (12 in the last 5 years), 2013–2026 · leading case: Block v. Seneca Mortg. Servicing, 221 F. Supp. 3d 559 (D.N.J. 2016).
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Block v. Seneca Mortg. Servicing, 221 F. Supp. 3d 559 (D.N.J. 2016). “12 C.F.R. 1024.5(a) applies RESPA to “federally related mortgage loans.”
In re Kolnberger, 603 B.R. 253 (Bankr. E.D.N.Y. 2019). “LEXIS 139574 , at *7 ; and Whether the mortgage at issue was executed incident to a personal loan; "RESPA does not apply to '[b]usiness purpose loans,' " 12 C.F.R. § 1024.5 (a) - (b). *266 Sylvester v.”
Royal Host Realty, LLC v. 793 Ninth Avenue Realty, LLC, 192 F. Supp. 3d 348 (S.D.N.Y. 2016). “Legal Standard The provisions of RESPA and TILA do not apply to credit transactions involving extensions of credit “primarily for business, commercial, or agricultural purposes.”
State Nat'l Bank of Big Spring v. Geithner, 958 F. Supp. 2d 127 (D.D.C. 2013). “at 18 (citing 12 C.F.R. § 1024.5 (b)(1))), and § 1024.41(j) only comes into effect if the loans are secured by a borrowers’ principal residence.”
Mersad Rahmanovic (Bankr.D. Colo. 2026). · cites it 2× “§ 2605 (a); 12 C.F.R. § 1024.5 (a). 24 12 U.S.C. § 2602 (1).”
In re: Mersad Rahmanovic v. Sconset Resources, LLC, Martin Bloom, Deanne R. Stodden, & Messner Reeves, LLP (Bankr.D. Colo. 2026). · cites it 2× “§ 2605 (a); 12 C.F.R. § 1024.5 (a). 18 12 U.S.C. § 2602 (1).”
Klinkman v. Truist Bank (M.D. Fla. 2024). “See 12 C.F.R. § 1024.5 (b); see also Paul Barron, Federal Regulation of Real Estate and Mortgage Lending § 2:5 (4th ed.”
Bezek v. First Mariner Bank (D. Maryland 2020). “§ 2606 (a); 12 C.F.R. § 1024.5 (b). While it is possible that some putative class members’ loans will fall within a relevant exemption, the Court is not persuaded that this number will exceed a negligible percentage of loans encompassed by the class definition.”
Denton v. Nationstar Mortg. LLC (N.D. Okla. 2020). “” 12 C.F.R. § 1024.5 (a). “This term includes almost every loan secured by a lien on residential real property in the United States designed principally for one-to-four family occupancy.”
Ditech Holding Corp. (Bankr. S.D.N.Y. 2024). “12 C.F.R. § 1024.5 (a). As relevant, that includes any loan secured by a lien on residential real property.”
Marrett v. Aroostook Cnty. Fed. Sav. & Loan (D. Me. 2024). “10 Because the insurance charges were evidently not imposed until November 2021, two months after the September 2021 notice of default and right to cure letter, and because the cost of the insurance premiums ($45 per month) was relatively small compared to the size of the…”
Peek v. Clear Sky Fin., LLC (D.D.C. 2024). “§ 2606 ; see also 12 C.F.R. § 1024.5 (b)(2) (explaining that RESPA “does not apply to “[a]n extension of credit primarily for a business, commercial, or agricultural purpose.”
Show all 18 citing cases →
— 12 C.F.R. § 1024.5(a) — 1 case
Block v. Seneca Mortg. Servicing, 221 F. Supp. 3d 559 (D.N.J. 2016). “12 C.F.R. 1024.5(a) applies RESPA to “federally related mortgage loans.”
— 12 C.F.R. § 1024.5(b)(2) — 3 cases
Royal Host Realty, LLC v. 793 Ninth Avenue Realty, LLC, 192 F. Supp. 3d 348 (S.D.N.Y. 2016). “Legal Standard The provisions of RESPA and TILA do not apply to credit transactions involving extensions of credit “primarily for business, commercial, or agricultural purposes.”
Mersad Rahmanovic (Bankr.D. Colo. 2026). “§ 2605 (a); 12 C.F.R. § 1024.5 (a). 24 12 U.S.C. § 2602 (1).”
In re: Mersad Rahmanovic v. Sconset Resources, LLC, Martin Bloom, Deanne R. Stodden, & Messner Reeves, LLP (Bankr.D. Colo. 2026). “§ 2605 (a); 12 C.F.R. § 1024.5 (a). 18 12 U.S.C. § 2602 (1).”
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