We have a situation where we have a 6 month construction loan coming due. The customer wants to take the permanent out with us also. The loan officer wanted to modify the loan to perm. We think it would be better and cleaner to make a whole new transaction for the perm. Can you modify a construction to perm? When would you disclose the early docs?

Thank you

Can you? Yes. It can be seen as circumventing, however.

When would you disclose the early docs? To answer that, I need to ask
"If the applicants applied for a construction loan, where was the permanent financing supposed to be coming from?"

If the bank didn't have a permanent take out from another lender, then your bank MAY have been doing the permanent (probably planned on it). That means they were applying for permanent financing in the beginning and your bank broke it into 2 phases (construction followed by permanent). If that's right, the early disclosures representing the permanent phase should have been provided at the same time as the early docs for the construction phase.

If you had a permanent take out and only planned to do the construction loan, then it's a different scenario.
1. If you modify the loan, there are no new early disclosures. OR
2 If you do a new loan (perm) to replace the construction loan, you have a new request for credit (a new application) and need to provide early disclosures within 3 days of that request.