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#1885511 - 01/10/14 08:51 PM Temp Construction loans exempt from interest only?
cheech Offline
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Chatsworh PA
Are temporary construction loans exempt from the prohibition of interest only loans?

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Ability to Repay/Qualified Mortgage Rule
#1885528 - 01/10/14 09:04 PM Re: Temp Construction loans exempt from interest only? cheech
RR Joker Offline
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yes, if the term is 12 months or less:

(iii) A construction phase of 12 months or less of a construction-to-permanent loan;
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#1885556 - 01/10/14 09:28 PM Re: Temp Construction loans exempt from interest only? cheech
dblack Offline
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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.
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#1885610 - 01/10/14 10:18 PM Re: Temp Construction loans exempt from interest only? cheech
cheech Offline
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Chatsworh PA
Thanks for the quick response

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#1885883 - 01/13/14 04:30 PM Re: Temp Construction loans exempt from interest only? cheech
nelender1 Offline
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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.

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#1886409 - 01/14/14 05:25 PM Re: Temp Construction loans exempt from interest only? cheech
1995Banker Offline
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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!
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#1886548 - 01/14/14 07:39 PM Re: Temp Construction loans exempt from interest only? cheech
RR Joker Offline
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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.
Last edited by RR Joker; 01/14/14 07:39 PM.
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#1886576 - 01/14/14 07:58 PM Re: Temp Construction loans exempt from interest only? cheech
1995Banker Offline
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Posts: 238
Thank you RR.
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