This regulation implements the new laws established by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

APR threshold raised for determining higher-priced jumbo loan impound requirement

12 Code of Federal Regulations 226.35(b)(3)
Amended by H.R. 4173
Effective: April 1, 2011

A jumbo loan secured by a borrower’s principal residence with an annual percentage rate (APR) 2.5% (raised from the prior 1.5% threshold) or greater than the average prime offer rate for a comparable loan is considered a higher-priced mortgage subject to mandatory impound requirements.

This regulation does not apply to bridge loans with a term of 12 months or less, or reverse mortgages.