RESPA applies primarily to which type of financing?

RESPA, which stands for the Real Estate Settlement Procedures Act, is primarily concerned with the disclosure of information related to the costs and terms of residential real estate transactions, particularly those involving mortgage financing. Its main purpose is to help consumers understand the costs associated with the loan and to eliminate abusive practices in the settlement process.

The act specifically applies to most residential mortgage loans, which include loans for single-family homes, multi-family homes, and other types of residential properties. The regulations imposed by RESPA require lenders to provide borrowers with a Good Faith Estimate of settlement costs, a HUD-1 Settlement Statement, and other pertinent details that ensure the borrower is informed throughout the transaction.

While RESPA does not cover commercial loans, home equity loans, or construction loans in a broad sense, the regulations are tailored to ensure consumer protection specifically in the realm of residential first mortgages. Thus, residential first mortgages are indeed the primary focus of RESPA, as they are most commonly associated with the purchase of a home and consumer financing.