Good faith estimate

Key Takeaways

• The Good Faith Estimate was the RESPA disclosure that estimated a borrower's settlement costs and named the service providers the lender required, delivered within three business days of a loan application.
• For applications received on or after October 3, 2015, the TILA-RESPA rule combined the Good Faith Estimate and the initial Truth in Lending disclosure into a single form, the Loan Estimate.
• The Good Faith Estimate still exists in Regulation X at 12 CFR 1024.7 and still governs the loans the Loan Estimate rule does not reach, most notably reverse mortgages.
• Any exam answer or client conversation that treats the Good Faith Estimate as the current disclosure for an ordinary purchase or refinance mortgage is out of date.

What It Means

The Good Faith Estimate, usually shortened to GFE, was the form a lender gave a borrower shortly after a mortgage application. It estimated the settlement costs the borrower would owe and named the service providers the lender required. Regulation X, the rule that implements the Real Estate Settlement Procedures Act, required it no later than three business days after the lender received an application, and the HUD-1 Settlement Statement later showed the actual figures at the closing table.

That pairing ended for most consumer mortgages. The TILA-RESPA Integrated Disclosure rule, known as Trid, applies to applications received on or after October 3, 2015. It merged the Good Faith Estimate and the initial Truth in Lending disclosure into one form, the Loan Estimate, and merged the HUD-1 and the final Truth in Lending disclosure into the Closing Disclosure.

The GFE was not struck from the rulebook, though. Section 1024.7 of Regulation X is still on the books, and the Good Faith Estimate still applies to the narrow set of federally related mortgage loans that the integrated disclosures do not cover.

How It Works in Washington

Washington's own fee disclosure statute survived the federal change and still shapes what a borrower receives here. RCW 19.146.030, part of the Mortgage Broker Practices Act, requires a mortgage broker or loan originator to deliver a full written disclosure itemizing and explaining all fees and costs within three business days after receiving a loan application, and it names the items that must be broken out, including the credit report, appraisal, title report, title insurance policy, mortgage insurance, escrow fee, property tax, and inspections. The statute treats compliance with the federal Real Estate Settlement Procedures Act and Regulation X as satisfying the state requirement, so for an ordinary Washington purchase loan the Loan Estimate now does that job.

Where a Washington borrower still sees a Good Faith Estimate is on the loans the integrated disclosures skip. The Loan Estimate requirement covers a closed-end consumer credit transaction secured by real property or a cooperative unit other than a reverse mortgage, so a Washington homeowner taking out a reverse mortgage receives a GFE rather than a Loan Estimate. A home equity line of credit is handled a third way: under 12 CFR 1024.7(h), giving the borrower the Regulation Z home equity disclosures at application satisfies the GFE requirement.

Example

Marlene is 74 and owns a paid off house in Spokane. In March 2026 she applies for a reverse mortgage. Because a reverse mortgage is excluded from the Loan Estimate requirement, her lender sends a Good Faith Estimate three business days after her application, showing $2,800 in estimated origination charges, $1,150 in third party settlement services, and $1,600 in prepaid items, for $5,550 in estimated settlement costs.

Her son Cole buys a townhouse in Spokane Valley the same month with a conventional 30 year purchase loan. Cole never sees a Good Faith Estimate at all. He receives a Loan Estimate three business days after applying and a Closing Disclosure at least three business days before closing. Two family members, two loans in the same county in the same month, and two different disclosure regimes. The difference is the loan type, not the state.

Common Mistakes and Exam Traps

• The Good Faith Estimate is no longer the disclosure for an ordinary purchase or refinance mortgage. For applications received on or after October 3, 2015, the Loan Estimate replaced it, and any answer naming the GFE as the current form for a standard home loan is wrong.
• The Good Faith Estimate was replaced by the Loan Estimate, and the HUD-1 Settlement Statement was replaced by the Closing Disclosure. Pairing the GFE with the Closing Disclosure, or the Loan Estimate with the HUD-1, mixes the two eras.
• The Good Faith Estimate came from RESPA and Regulation X, not from the Truth in Lending Act. The initial Truth in Lending disclosure was a separate form, and the TILA-RESPA rule merged the two into the Loan Estimate.
• Retired is not the same as repealed. Section 1024.7 of Regulation X still exists, and the Good Faith Estimate still applies to loans outside the integrated disclosure rule, such as reverse mortgages.