Minnesota Session Laws - 2026 Regular Session

CHAPTER 58--H.F.No. 3437

An act

relating to commerce; modifying the application of residential mortgage loan fees and penalties in certain instances;

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

new text begin Subdivisions 1 and 2 do not apply to a residential mortgage loan that is a purchase money, first lien, or DSCR loan, as defined in section 58.20, subdivision 5a, if: new text end

new text begin (1) the loan is made for investment purposes only; new text end

new text begin (2) no borrower, guarantor, or cosigner intend to or do occupy the residential real property securing the loan; and new text end

new text begin (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: new text end

new text begin (1) that is not a qualified mortgage, as defined in United States Code, title 15, section 1639c; new text end

new text begin (2) secured by investment property; and new text end

new text begin (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. new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2026, and applies to residential mortgage loans executed on or after that date. new text end

Presented to the governor April 28, 2026