The following transactions are not subject to this part or, if the exemption is limited to specified provisions of this part, are not subject to those provisions:
* * * * *
(h) Partial exemption for certain mortgage loans. The special disclosure requirements in Sec. 1026.19(e), (f), and (g) do not apply to a transaction that satisfies all of the following criteria:
(1) The transaction is secured by a subordinate lien;
(2) The transaction is for the purpose of:
(i) Downpayment, closing costs, or other similar home buyer assistance, such as principal or interest subsidies;
(ii) Property rehabilitation assistance;
(iii) Energy efficiency assistance; or
(iv) Foreclosure avoidance or prevention;
(3) The credit contract does not require the payment of interest;
(4) The credit contract provides that repayment of the amount of credit extended is:
(i) Forgiven either incrementally or in whole, at a date certain, and subject only to specified ownership and occupancy conditions, such as a requirement that the consumer maintain the property as the consumer's principal dwelling for five years;
(ii) Deferred for a minimum of 20 years after consummation of the transaction;
(iii) Deferred until sale of the property securing the transaction; or
(iv) Deferred until the property securing the transaction is no longer the principal dwelling of the consumer;
(5) The total of costs payable by the consumer in connection with the transaction at consummation is less than one percent of the amount of credit extended and includes no charges other than:
(i) Fees for recordation of security instruments, deeds, and similar documents;
(ii) A bona fide and reasonable application fee; and
(iii) A bona fide and reasonable fee for housing counseling services; and
(6) The creditor complies with all other applicable requirements of this part in connection with the transaction, including without limitation the disclosures required by Sec. 1026.18.