Document Updates: Minnesota Prepayment Disclosure at Application (Cx1892) & Minnesota Prepayment Disclosure at Closing (Cx1893)

Per Minn. Stat. Ann. §58.137(2)(b), the following disclosure is required to be made within five (5) days of making a loan application and within three (3) days before closing:

THIS IS VERY IMPORTANT

THIS LENDER CHARGES YOU A SUBSTANTIAL PENALTY IF YOU PAY OFF OR REFINANCE YOUR LOAN BEFORE MATURITY. ASK THE LENDER HOW MUCH THE PENALTY WILL BE FOR YOUR LOAN.

On April 29, 2026, Minnesota House File Number 3437 was enacted with the following changes:

Section 1. Minnesota Statutes 2024, section 58.137, is amended by adding a subdivision to read:

• Subd. 4. Exception. 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:
  • (1) the loan is made for investment purposes only;
  • (2) no borrower, guarantor, or cosigner intend to or do occupy the residential real property securing the loan; and
  • (3) the seller does not continue to occupy the residential real property after the sale.

Sec. 2. Minnesota Statutes 2024, section 58.20, is amended by adding a subdivision to read:

• Subd. 5a. Debt service coverage ratio loan or DSCR loan. “Debt service coverage ratio loan” or “DSCR loan” means a mortgage:
  • (1) that is not a qualified mortgage, as defined in United States Code, title 15, section 1639c;
  • (2) secured by investment property; and
  • (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.

EFFECTIVE DATE. This section is effective August 1, 2026, and applies to residential mortgage loans executed on or after that date.

As a result, FI 194774 “Print Minnesota Prepayment Penalty Disclosure” has been recently created. If any of the exemptions listed above apply to the loan transaction, both FI 20136 “Loan Has Prepayment Penalty” and FI 194774 “Print Minnesota Prepayment Penalty Disclosure” should be set to equal “No”.

The disclosures will now print under the following conditions:

Cx1892 “MN Prepayment Disclosure at Application”:
Base Type (2274) = Conventional
State Code (2279) = Minnesota
Document Package Type (18215) = Initial Disclosure
Loan Has Prepayment Penalty (20136) = Yes
Print Minnesota Prepayment Penalty Disclosure (194774) = Yes

Cx1893 “MN Prepayment Disclosure at Closing”:
Base Type (2274) = Conventional
State Code (2279) = Minnesota
Document Package Type (18215) = Closing
Loan Has Prepayment Penalty (20136) = Yes
Print Minnesota Prepayment Penalty Disclosure (194774) = Yes

These changes are available for testing on Stage & Stage 2 servers and will take effect on August 1, 2026. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

LEG-3809
T3S-28832

The preceding is for informational purposes only and is not and may not be construed as legal advice. No third-party entity may rely upon anything contained herein when making legal and/or other determinations regarding its practices, and such third-party should consult with an attorney prior to embarking upon any specific course of action.