Iowa SF398 modifies closing costs for debts secured by land interests, allowing certain fees if they are bona fide and reasonable.

Iowa SF398 amends the state's Code to allow creditors to receive closing costs for debts secured by land interests, provided these costs are bona fide, reasonable, and not for circumvention purposes. It specifies that fees or charges listed in Code section 535.8(4)(a) and (b) are permitted, except if the creditor is a mortgage banker and the points and fees charged do not exceed federal limits. The bill also allows creditors to receive discount points for reducing the interest rate or time-price differential. Effective July 1, 2025.

Iowa SF398 modifies closing costs for debts secured by land interests, allowing certain fees if they are bona fide and reasonable.

Iowa SF398 amends the state's Code to allow creditors to receive closing costs for debts secured by land interests, provided these costs are bona fide, reasonable, and not for circumvention purposes. It specifies that fees or charges listed in Code section 535.8(4)(a) and (b) are permitted, except if the creditor is a mortgage banker and the points and fees charged do not exceed federal limits. The bill also allows creditors to receive discount points for reducing the interest rate or time-price differential. Effective July 1, 2025.