Illinois adopted a rule requiring a shared appreciation disclosure be provided to a borrower in connection with a shared appreciation agreement. Under the adopted rule, if a borrower submits an application for a shared appreciation agreement, the lender must provide a shared appreciation disclosure to the borrower no later than 3 business days after the application is completed. If the terms of the agreement are subject to change, a 2nd shared appreciation disclosure must be provided to the borrower at least 72 hours prior to closing stating that the terms are no longer subject to change. The shared appreciation disclosure must be provided in the form provided in the rule adoption (or a substantially similar form). The rule also sets forth the method for calculating the property value, actual appreciation and final payment amount required to be included on the shared appreciation disclosure.
In addition, for a loan which advances funds through a Shared Appreciation Agreement:
- A mortgage lender, servicer, or purchaser must furnish within 5 business days after receipt of a written request from a borrower (or an entity authorized by the borrower) an initial estimate of the total amount required for the borrower to pay at the termination or settlement of the shared appreciation agreement; and
- A mortgage lender, servicer, or purchaser must furnish a final written notice of the total amount required for the borrower to pay at the termination or settlement of the shared appreciation agreement to the borrower (or an entity authorized by the borrower) within 3 business days after the mortgage lender, servicer, or purchase receives the valuations on which the Ending Home Value and Final Settlement Payment Amount are based, but no more than 30 days after the mortgage lender, servicer, or purchaser received the initial written request from the borrower (or an entity authorized by the borrower).
The rule went into effect June 1, 2026.
Click to view the IL RA 20774: https://www.tenaco.com/wp-content/uploads/2026/06/IL-RA-20774-06-15-26.pdf
