I am really struggling on this one. Need to get an answer to the lender ASAP.

This is a consumer purpose, closed end request – I'm looking for some confirmation I've thought this out correctly regarding RESPA and rescission:

Applicants currently live in a mobile home on an acreage (there is no foundation, the MH is titled). The MH is their primary dwelling.

They have applied for a 5-year loan to purchase the land upon which their current mobile home is located.

In 3-5 years they plan to request new financing to payoff the balloon on the 5-yr note, and build a foundation upon which they’ll place a new mobile home.

Is the 5-yr loan subject to RESPA? Here’s what I think but not 100% sure:
No - vacant land exception if we don't take a security interest in the current mobile home). Even if the MH is taken as security it is not attached to the land, they are separately titled. RESPA would still not apply.

Is the 5-yr loan subject to Rescission? No - as long as the bank does not take a security interest in the current mobile home. But definitely yes if a security interest is taken in the current (titled) mobile home.

Another bank told them they’d only do the deal if they moved the MH off the property, close the loan, and 3 days later could move the MH back on. Am I missing something?

If the loan is secured by both the MH and land RESPA would apply. There's no "foundation" requirements in RESPA. If secured by the land only RESPA will not apply.

ROR will not apply if the MH is not being taken as security.

But we have different ownership. If an interest in both the land and the titled MH is taken, would this still be considered "residential real property?" The land is owned by one individual and the MH is owned by another? That's where I'm wavering.

Federally related mortgage loan or mortgage loan means as follows:
(1) Any loan (other than temporary financing, such as a construction loan):
(i) That is secured by a first or subordinate lien on residential real property, including a refinancing of any secured loan on residential real property upon which there is either:
(A) Located or, following settlement, will be constructed using proceeds of the loan, a structure or structures designed principally for occupancy of from one to four families (including individual units of condominiums and cooperatives and including any related interests, such as a share in the cooperative or right to occupancy of the unit); or
(B) Located or, following settlement, will be placed using proceeds of the loan, a manufactured home ;

Whoops, I hit the button too fast! The Reg. X citation shown above, perhaps I am reading it wrong? Dan, are you saying any old mobile home if parked on some vacant land, regardless who owns the MH will consititute residential real estate?

My original post is still correct. In a nutshell...
Applicant aleady owns the MH located on the land.
He wants a loan to purchase the land, to be secured by the land and the MH.
So...the land plus the MH equals "residential real property" for RESPA and we've got to offer Rescission since we're taking his primary dwelling.
Right?