The Real Estate Settlement Procedures Act primarily applies to which type of loans?

The Real Estate Settlement Procedures Act (RESPA) is designed to protect consumers in the real estate transaction process, specifically in relation to the settlement of federally related mortgage loans. It is focused on loans that are insured by the federal government, such as loans guaranteed by the Federal Housing Administration (FHA) or backed by the Department of Veterans Affairs (VA). Because the Act is intended to transparency in the closing process, and to ensure that buyers are aware of their rights regarding settlement costs, it primarily applies to loans for one-to four-family dwellings.

This focus on residential properties allows RESPA to address common concerns and practices that affect consumers in the buying and financing of homes. Therefore, the emphasis on federally related loans for one-to four-family dwellings is critical as it aligns with the Act's goal of promoting fairness, transparency, and informed decision-making in residential real estate transactions.