What does the Real Estate Settlement Procedures Act (RESPA) primarily apply to?

The Real Estate Settlement Procedures Act (RESPA) primarily applies to residential loans, which encompass loans used to purchase or refinance one-to-four family residential properties. RESPA was established to ensure transparency in the settlement process, protect consumers from abusive practices, and provide timely disclosures regarding settlement costs.

The act mandates that lenders supply borrowers with important information about the costs associated with their loan settlements, such as the Good Faith Estimate and the HUD-1 Settlement Statement. These rules are specifically designed to inform consumers who are engaging in residential transactions, making it clear that RESPA targets the residential sector primarily.

While the other choices involve different types of loans, they do not fall under the scope of RESPA as directly as residential loans do. Specifically, residential lot loans may not yet involve a dwelling, commercial loans pertain to business properties and transactions, and residential investment properties, while still residential, can sometimes involve different financing structures or guidelines. These distinctions reinforce that RESPA's main focus is on standard residential home financing.