For the purposes of determining whether the amount of points and fees meets the definition of "high risk home loan" under this Act, either the amounts described in paragraph (1) or (2) of this Section, but not both, shall be excluded:

1. (1) Up to and including 2 bona fide discount points payable by the consumer in connection with the mortgage, but only if the interest rate from which the mortgage's interest rate will be discounted does not exceed by more than one percentage point:

   1. (A) the average prime offer rate, as defined in Section 129C of the federal Truth in Lending Act (15 U.S.C. 1639); or
   2. (B) if secured by a personal property loan, the average rate on a loan in connection with which insurance is provided under Title I of the National Housing Act (12 U.S.C. 1702 et seq.).

2. (2) Unless 2 bona fide discount points have been excluded under paragraph (1), up to and including one bona fide discount point payable by the consumer in connection with the mortgage, but only if the interest rate from which the mortgage's interest rate will be discounted does not exceed by more than 2 percentage points:

   1. (A) the average prime offer rate, as defined in Section 129C of the federal Truth in Lending Act (15 U.S.C. 1639); or
   2. (B) if secured by a personal property loan, the average rate on a loan in connection with which insurance is provided under Title I of the National Housing Act (12 U.S.C. 1702 et seq.). Paragraphs (1) and (2) shall not apply to discount points used to purchase an interest rate reduction unless the amount of the interest rate reduction purchased is reasonably consistent with established industry norms and practices for secondary mortgage market transactions.

(Source: P.A. 97-849, eff. 1-10-14 (see Section 10 of P.A. 97-1159, 78 Fed. Reg. 6855, 6857, 78 Fed. Reg. 10695, 10696, and 78 Fed. Reg. 44685, 44686).)