This bill amends Minnesota Statutes to modify the application of residential mortgage loan fees and penalties in specific circumstances. It introduces a new subdivision to section 58.137, which states that certain provisions regarding fees and penalties do not apply to residential mortgage loans that are classified as purchase money, first lien, or debt service coverage ratio (DSCR) loans, provided that the loan is made solely for investment purposes, the borrower does not occupy the property, and the seller vacates the property after the sale.

Additionally, the bill adds a new subdivision to section 58.20, defining a "debt service coverage ratio loan" or "DSCR loan." This definition specifies that a DSCR loan is a mortgage that is not classified as a qualified mortgage, is secured by investment property, and is based on the expected cash flow from the investment property rather than the borrower's personal income. The provisions of this bill will take effect on August 1, 2026, and will apply to residential mortgage loans executed on or after that date.

Statutes affected:
Introduction: 58.137
1st Engrossment: 58.137, 58.20
2nd Engrossment: 58.137, 58.20
1st Unofficial Engrossment: 58.137, 58.20