If the APR on a first-lien transaction is equal to or greater than APOR + 1.5%, the loan will be
considered a Higher Priced Mortgage Loan.
If the APR on a subordinate-lien transaction is equal to or greater than APOR + 3.5%, the
loan will be considered a Higher Priced Mortgage Loan.
The Average Prime Offer Rate (APOR) is published by the Board of Governors of the Federal
Reserve System once per week and is posted on the Federal Financial Institutions Examination
Council’s website. To determine if a loan is a Higher Priced Mortgage Loan, you must utilize the
APOR published the week the interest rate is locked.
ELIGIBLE PRODUCTS
Certain products may be closed as higher priced mortgage loans. If the APR on a loan falls into the
HPML category, the product must be eligible in order to close and fund. Please refer to the ineligible
product section to determine if a product is eligible or ineligible.
Please note, in April 2010, transactions deemed to be Higher Priced Mortgage Loans will not be
allowed to have an escrow waiver.
INELIGIBLE PRODUCTS
Loans with the following characteristics are not eligible to close as a Higher Priced Mortgage Loan. If
the product is ineligible, the APR must be reduced in order to close and fund. These loans must
close below the maximum allowable APR so that the loan is not considered HPML.
Adjustable Rate Mortgage (ARM) – Conventional & Government
1/1 ARM
3/1 ARM
5/1 ARM
FHA loans
VA Interest Rate Reduction Refinance Loans (IRRRL)
Freddie Mac Relief Refinance
Any loan with a pre-payment penalty
This has nothing to do with credit scores, loan amount, down payment or equity, but can complicate getting a loan and a lock expiration… Do you feel safer now ???… HLS
