OpenChainGraph Suite · ART-235 · US Mortgage Compliance

HPML Escrow Requirement Test

Tests the HPML higher-priced mortgage loan definition per Reg Z §1026.35(a) and the resulting escrow obligation per §1026.35(b). A loan is HPML if its APR exceeds the APOR by 1.5 percentage points (first-lien standard), 2.5pp (first-lien jumbo above the FHFA conforming limit), or 3.5pp (subordinate lien). These Dodd-Frank structural thresholds have been unchanged since 2014. First-lien HPMLs must maintain a property-tax-and-insurance escrow for at least 5 years unless a rural/underserved small-creditor or condo master-policy exemption applies. Separate from HOEPA high-cost triggers (art-234).

Reg Z §1026.35(a)+(b) Dodd-Frank structural HPML Definition Escrow Requirement Rural/Underserved Exemption

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Rate and Loan Inputs

APR (%)

Loan annual percentage rate.

APOR (%)

Average Prime Offer Rate from FFIEC weekly table for a comparable transaction.

Lien type

Jumbo loan (loan amount above FHFA conforming limit)

Raises HPML threshold to APOR+2.5pp for first-lien transactions per §1026.35(a)(1)(i)(B).

Escrow Exemptions (§1026.35(b)(2)) — First Lien Only

Rural/underserved small-creditor exemption (all three must apply)

Property in rural or underserved area Creditor total assets under $2 billion 500 or fewer first-lien HPMLs originated in the prior year

Condo master-policy exemption

Condominium: HOA master policy covers hazard insurance for all units (§1026.35(b)(2)(ii))

Year

Detail

Execution Hash (SHA-256)