When is a $100,000 loan classified as a Section 32 loan based on points and fees?

The classification of a loan as a Section 32 loan, which is often governed by the Home Ownership and Equity Protection Act (HOEPA), is primarily determined by the points and fees associated with the loan. For a loan amount of $100,000, the threshold for the points and fees that can lead to the loan being classified as high-cost is set at 5% of the loan amount.

In this case, if the $100,000 loan has points and fees exceeding 5% of the loan amount, it would be classified as a Section 32 loan. This aligns with the regulations that stipulate that for loans of $20,000 or more, the threshold is 5% of the loan amount.

This understanding of the point and fee structure is crucial for mortgage loan originators to identify high-cost loans and ensure compliance with federal regulations. The other options refer either to percentages of the sale price or to incorrect thresholds that do not adhere to the stipulations of HOEPA regarding high-cost loans.