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Reg C: Is there a definition of temporary financing?
by: Lucy Griffin, BOL Guru
BIO AND CONTACT INFO
Question: Is there a definition of temporary financing for purposes of Reg C. Is it a
loan under 1 year or is it just construction or bridge loans? The reg says "other temporary financing". What is meant by that?
Answer: Reg C doesn't itself contain a definition of temporary financing. It is probably useful to look to both Regulation Z and RESPA for guidance. Temporary financing is generally understood to mean a loan that will be followed by a permanent loan. This includes bridge loans to facilitate the sale and purchase of properties. It also includes construction loans that will be followed by permanent financing. Not reporting temporary loans is a means of preventing double reporting on properties.
First published on BankersOnline.com 3/11/02
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