When underwriting a construction loan do you base the taxes on what the value of the property is at origination or on the projected value of the property at completion?

I have always taken an estimate, either from the appraiser or take 1½ times the lot taxes to use for escrow. If you only escrow for the lot taxes your borrower is going to have quite a payment shock when you have to adjust the escrow when the property gets assessed with the home.

From RESPA 3500.17 (refer to last sentence)

  (7)  Servicer estimates of disbursement amounts. To conduct an escrow account analysis, the servicer shall estimate the amount of escrow account items to be disbursed. If the servicer knows the charge for an escrow item in the next computation year, then the servicer shall use that amount in estimating disbursement amounts. If the charge is unknown to the servicer, the servicer may base the estimate on the preceding year's charge, or the preceding year's charge as modified by an amount not exceeding the most recent year's change in the national Consumer Price Index for all urban consumers (CPI, all items). In cases of unassessed new construction, the servicer may base an estimate on the assessment of comparable residential property in the market area.