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#1789718 - 02/27/13 06:10 PM Contruction-Perm loan "Refi"
Many Hats Offline
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Orlando, FL
If we do a loan that is essentially a refinance of an exisitng construction to perm loan from another bank (and the construction is not yet complete - only 90% and no CO yet), is it reported as a refinance or a purchase?

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#1789727 - 02/27/13 06:17 PM Re: Contruction-Perm loan "Refi" Many Hats
raitchjay Online
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OK
I misread your post the first time. What is "CO" in this context? This is interesting actually; i think the argument could be made that while it's definitely a refinance, it is also still a purchase since the construction isn't yet complete and presumably your funds will be used to purchase materials that will finish the construction. I'd lean towards categorizing it as a purchase. ETA: i realize your loan isn't replacing a construction-only loan but instead is a construction-perm replacing a construction-perm....it's the fact that the home isn't actually built (at least not totally) yet that would make me lean towards calling it a purchase.
Last edited by raitchjay; 02/27/13 06:18 PM.
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#1789730 - 02/27/13 06:17 PM Re: Contruction-Perm loan "Refi" Many Hats
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Orlando, FL
CO - Certificate of Occupancy

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#1789732 - 02/27/13 06:21 PM Re: Contruction-Perm loan "Refi" Many Hats
raitchjay Online
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OK
I think it's a purchase. Your loan is still for construction and construction equates to buying the home.
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#1789736 - 02/27/13 06:33 PM Re: Contruction-Perm loan "Refi" Many Hats
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
a refinance of an exisitng construction to perm loan from another bank

Are you:

1. Converting a construction loan to permanent financing, or

2. Refinancing a construction/permanent loan?

If:

1. Report as a home purchase.

2. Report as a refinancing.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1789742 - 02/27/13 06:34 PM Re: Contruction-Perm loan "Refi" Many Hats
Many Hats Offline
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Orlando, FL
Doing both....refinancing the contruction to perm loan at another bank and doing another construction to perm loan (to finish the construction) and will be doing the permanent financing as well.

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#1789746 - 02/27/13 06:37 PM Re: Contruction-Perm loan "Refi" Many Hats
Dan Persfull Offline
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Dan Persfull
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Posts: 46,364
Bloomington, IN
In that case it's a home purchase.
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The opinions expressed are mine and they are not to be taken as legal advice.

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