We have a customer that would like to purchase a large parcel of land. Lease out the land and have those leasers build houses on it. The mortgage for the leasers would be executed by the bank but the customer would take full recourse. Has anyone ever performed these kinds of loans and if so, where do you start with regulations. For instance, if we are extending construction to permanent one step loans, it would not be covered by RESPA because they don't own the dirt right?

Any insight will be appreciated.

bump

There should be long term land leases to the homeowners. The leases are assigned to the bank. The lease must be at least as long as the mortgage and preferably longer in case the bank ends up with the property.

The land lease triggers RESPA.

The bank needs to get legal counsel involved to make sure you set up a good process.