Section 1050.2300  Definitions

"Actual change in value" means, with respect to each scenario included on the disclosure form found in Appendix C of this chapter, the average annual change in value for homes in the State of Illinois over the most recent number of years used in that scenario.

"Annual percentage rate" has the meaning stated in 12 CFR 1026.22(a), as amended from time to time.

"Annualized cost" means a measure of the cost of credit, expressed as a yearly rate, provided to allow a borrower to compare the cost of a shared appreciation agreement with the cost of other forms of credit.

"Arms-length sale" means a transaction for the sale of property between two unrelated and unaffiliated parties of equal bargaining power acting independently and in their respective self-interests.

"Automated valuation model" or "AVM" means a statistically based estimate of a property's value based on publicly available information such as comparable sales, property characteristics, and price trends.

"Borrower" means a person who receives funds under a shared appreciation agreement.

"Broker price opinion" or "BPO" means an estimate, provided by a real estate broker licensed by the State or another qualified professional, of the price for which a property is likely to sell.

"Commitment" shall mean a contract for residential mortgage loan financing.

"Ending Home Value" means the value of the property at the termination of the shared appreciation agreement as calculated using the estimated fair market value of the property, or, in an arms-length sale, the sale price of the property.

"Estimated fair market value" means:

an estimate of value determined through either:

the use of an appraisal from an appraiser licensed by the State; or

the average of two distinct non-appraisal valuation methods, which may include an automated valuation model, a broker price opinion, or another valuation method approved by the Department; or

an estimate of value provided by the borrower, if a disclosure is provided before the lender obtains an estimated fair market value by appraisal, or the average of two distinct non-appraisal valuation methods.

"Final Settlement Payment Amount" means the amount a borrower is required to pay the lender at the termination of the shared appreciation agreement.

"Lender" shall mean any person, partnership, association, corporation, or any other entity who either lends or invests money in residential mortgage loans. [205 ILCS 635/1-4(g)]

"Share percentage" means the lender's share of the property's appreciation or value, based on the Ending Home Value, at the termination of the shared appreciation agreement as calculated without regard to any contractual limit on the repayment amount.

"Starting Home Value" means the estimated fair market value of a property as calculated under Section 1050.2320 of this Part.

"Truth in Lending Act" refers to 15 U.S.C. 1601, and its implementing regulations under 12 CFR 1026.

(Source:  Added at 50 Ill. Reg. 8010, effective June 1, 2026)