RESPA applies primarily to which types of properties?

RESPA, or the Real Estate Settlement Procedures Act, primarily applies to 1-4 family residential properties. This is because RESPA was designed to facilitate transparency in the home buying process for buyers of residential properties. The act requires that borrowers receive disclosures about the nature and costs of the settlement process, which is particularly essential for individuals purchasing homes for personal residence, as opposed to those engaging in commercial real estate transactions or buying vacant land.

The focus on 1-4 family residential properties ensures that consumers are informed about their rights and the costs associated with their home financing, thereby preventing any potential abuses by lenders and settlement service providers. This regulatory framework is essential for individuals entering the real estate market for the first time or those who might be less familiar with the complexities of real estate transactions.