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Question: HB 716 requires a new notice to each home loan applicant at closing, that warns them of penalties for fraudulent loan applications. Does this apply to rent house loans?
Answer: No. In order to understand the scope of this new requirement, note that it is added to chapter 343 of the Finance Code, which has its own definition of "home loan" and its own exceptions. Thus, the requirement applies to purchase money, construction and home equity loans secured by property used or to be used as the primary dwelling of the borrower. It does not apply to a reverse mortgage, HELOC, second home loan, or rent house loan. It does apply to manufactured housing and one- to four-family dwellings that fit within these criteria.
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