Are temporary construction loans exempt from the prohibition of interest only loans?

yes, if the term is 12 months or less:

(iii) A construction phase of 12 months or less of a construction-to-permanent loan;

And I believe if it is not a Construction-to-perm loan then it must be *initial* construction and under 12 months to get the exemption.

Thanks for the quick response

Are these interest only initial construction loans of 12 months or less considered "non standard" loans from the perspective of the "non-standard" to "standard" refinance exemption? We're thinking they are not.

We have a loan for the purchase and renovation of what will be a primary residence. Part of the proceeds will purchase and part of the proceeds will be used for renovation of the dwelling. We have treated loans like this in the past as temporary construction LOCs with interest only payments for 9 to 12 months. Since it is not a construction-to-perm loan or is not "initial" construction, can we continue to treat as temporary and therefore exempt? Thanks!

We don't treat those as temporary loans now. There is a transfer of title.

They also are not construction loans. You only construct once.

nelander - no, I would not.

Thank you RR.