SF 4168
1st Engrossment - 94th Legislature (2025 - 2026)
Posted on 04/08/2026 10:20 a.m.
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A bill for an act
relating to commerce; providing an exception for investment loans; defining debt
service coverage ratio loan; amending Minnesota Statutes 2024, sections 58.137,
by adding a subdivision; 58.20, by adding a subdivision.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2024, section 58.137, is amended by adding a subdivision
to read:
new text begin Subd. 4. new text end
new text begin Exception. new text end
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Subdivisions 1 and 2 do not apply to a residential mortgage loan
that is a purchase money, first lien, or DSCR loan if:
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(1) the loan is made for investment purposes only;
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(2) no borrower, guarantor, or cosigner intend to or do occupy the residential real property
securing the loan; and
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(3) the seller does not continue to occupy the residential real property after the sale.
new text end
Sec. 2.
Minnesota Statutes 2024, section 58.20, is amended by adding a subdivision to
read:
new text begin Subd. 5a. new text end
new text begin Debt service coverage ratio loan or DSCR loan. new text end
new text begin
"Debt service coverage
ratio loan" or "DSCR loan" means a mortgage:
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(1) that is not a qualified mortgage, as defined in United States Code, title 15, section
1639c;
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(2) secured by investment property; and
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(3) where the lender's decision to make the loan is based on the expected cash flow to
be generated from the investment property instead of the borrower's personal income.
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new text begin EFFECTIVE DATE. new text end
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This section is effective August 1, 2026, and applies to residential
mortgage loans executed on or after that date.
new text end