IDFPR Adopts Shared Appreciation Agreement Rules, Model Disclosure

The Illinois Department of Financial and Professional Regulation (IDFPR) recently adopted rules for shared appreciation agreements.  The new rules include definitions of statutory terms and a model Shared Appreciation Agreement Disclosure form that must be provided to prospective borrowers within three business days after application and again at least 72 hours before closing.  If there is a material change in the estimated disclosure form, a revised disclosure must be provided within three business days of discovery of the change and at least four business days before consummation.

The IDFPR has promulgated these rules following the Illinois legislature’s amendment of the Residential Mortgage License Act (in 2024, effective in 2025) to define mortgage loans to include shared appreciation agreements, as previously reported by WBK here.

The new rules include, among other things:

• timelines for the licensee to provide the borrower with an initial estimate and final written notice of the total amount owed by the borrower at the termination or settlement of the shared appreciation agreement;
• required contents of a Shared Appreciation Agreement Broker/Origination Loan Log and Shared Appreciation Agreement Servicer Log that must be maintained, as applicable; and
• specific counseling content about shared appreciation agreements, which must be provided by an independent HUD-certified counselor.

The shared appreciation agreement rules became effective June 1, 2026.