This bill amends Minnesota Statutes to provide an exception for certain investment loans related to residential mortgage loans. Specifically, it introduces a new subdivision to section 58.137, stating that the existing regulations 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 solely for investment purposes, the borrower does not occupy the property, and the seller does not continue to occupy the property after the sale.

Additionally, the bill defines a "debt service coverage ratio loan" in a new subdivision added to section 58.20. A DSCR loan is characterized as a mortgage that is not a qualified mortgage, secured by investment property, and where the lender's decision 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