OK, here is the deal:

I have a 12 month temporary loan that was a refi and construction interest only balloon loan for which we plan on doing the permanent financing that is a Higher Priced Mortgage loan.

So, do I follow the regular HPML closed end loan rules? Are my requirements, the same as a regular HPML (verification of ability to repay, escrow, etc.)?

I'm not sure what type of loan you have. A refinancing and funds for renovations, a refinancing of a existing construction loan or a refinancing and construction loan to build a new dwelling.

Unless you can fit it into the temporary loan exemption the loan would be subject to HPML.

Thanks Dan.

It is a 12 month loan that refinanced their loan from a different lender, but also included extra funds for improvements to the residence; payments were interest only for the 12 months then a balloon payment due on the 12th month (with the interest), that we planned on doing a regular 30 year permanent financing after the 12 months.

Sheesh.

Dan, still a short term loan vs. temporary financing based on the above?

Thanks again.

Appears to fall under temporary. Repayment will come from other longer term financing.