Applicant has applied to purchase home with additional funds to rehab. The house being purchased will be considered the applicants primary residence. Terms of loan will be a 9 mo. single pay with no take out committment provided.

I think this is a RESPA covered loan that would require escrow even though it is a single pay loan.

Is this correct?

How is the loan supposed to be repaid?

It would have to be with a longer term loan. No way the applicant could pay it off in nine months.

Would have to be with a long term loan.

Then I believe you can call this temporary. Having said that, I have had major arguments regarding this scenario with FRB examiners in the past...they always want to be conservative and go with the same definition put on construction loans...but they seem to be the 'lone wolf' on that ultra conservative translation. ;-)