You know, I was just in the HELP screens of the FFIEC APR calculator and while this is neither law nor regulation, I found a statement in the Help section under Construction Loans very intriguing:
Construction Loan
The APR program begins with two loan options. The first option is the Regular APR option. This option applies to all closed-end credit transactions. However, it need not be used for loans that meet the conditions of Appendix D to Regulation Z.
The second option, Construction Loan, applies only to loans that meet the conditions of Appendix D to Regulation Z. Loans subject to Appendix D involve multiple advance loans, including (but not limited to) real estate construction loans, for which the amounts or dates of advances are not known at the time disclosures are furnished.
If part or all of the initial advance is used to pay off one or more other loans, the Construction Loan option would still be available for the consolidated loan if the dates or amounts of any of the subsequent advances are unknown.
If the amounts and timing of all advances are known, or if there is only a single advance, the APR program's Regular APR option must be used.
_________________________
The opinions expressed here should not be construed to be those of my employer:
PPDocs.com