HOEPA applies to consumer credit transactions secured by principal dwelling when APR exceeds:

The correct answer encompasses all the conditions outlined in the choices, which together describe the scenarios under which the Home Ownership and Equity Protection Act (HOEPA) applies to consumer credit transactions secured by a borrower's principal dwelling based on the annual percentage rate (APR).

For first-lien transactions, HOEPA applies when the APR exceeds a specific threshold of 6.5 percentage points above the average prime offer rate. Additionally, for subordinate-lien transactions, the threshold is set at 8.5 percentage points above the average prime offer rate. These APR thresholds are crucial because they determine when a loan is classified as a high-cost mortgage, thus triggering additional disclosures and consumer protections under HOEPA.

The significance of ensuring compliance with HOEPA lies in the need to protect consumers from predatory lending practices that often accompany high-cost loans. By understanding these thresholds, lenders can better assess the risk involved in such transactions and establish transparent practices that safeguard borrowers’ interests.

Thus, recognizing that different thresholds apply to first-lien and subordinate-lien transactions highlights the comprehensive approach of HOEPA in addressing various scenarios in lending practices. This multifaceted comparison confirms that all conditions stated are valid, making the choice that includes all these elements the most accurate representation of HOEPA's application