Which properties does the RESPA statute apply to?

The RESPA statute, or the Real Estate Settlement Procedures Act, is designed to protect consumers by requiring disclosures that inform them about the settlement process. It specifically applies to most transactions involving 1-4 unit residential properties when a federally related mortgage loan is involved. This means that if a borrower is obtaining a loan that is backed by a federal agency (such as Fannie Mae, Freddie Mac, or the Department of Housing and Urban Development), the protections and disclosures stipulated by RESPA come into effect.

By mandating transparency in the closing process, RESPA reduces the likelihood of unexpected fees and provides essential information about the escrow process, the lender's cost estimates, and settlement services. This framework helps consumers understand their options and make informed decisions regarding their real estate transactions.

Other options reference situations that fall outside the scope of RESPA. Commercial properties, vacant land transactions, and cash transactions do not qualify under RESPA's protections, as they do not involve 1-4 unit residential housing secured by a federally related mortgage loan.