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#1789718 - 02/27/13 06:10 PM Contruction-Perm loan "Refi"
Many Hats Offline
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Joined: May 2008
Posts: 915
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 Offline
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Posts: 9,088
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
Many Hats Offline
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Joined: May 2008
Posts: 915
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 Offline
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Posts: 9,088
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
Joined: Aug 2002
Posts: 47,517
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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Joined: May 2008
Posts: 915
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
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
In that case it's a home purchase.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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