Construction loans are currently showing 11 months as the term on the LEs even though it's actually 12 months.

11 months of interest only plus one balloon payment

Auditor is saying we should be showing 1 year or 12 months for loan term but the mortgage processor said that it's 11 months because the first payment do not start until a month after consummation.

Thoughts?

Tell them to read the TRID proposal and in it they will find that the correct answer is 11 months, interest only.

Yes. The 12th payment is the balloon, which is not an interest only payment. Based on the "waterfall" in the Product section of Reg. Z and the commentary, the interest only is described before balloon. So, 11 mo. Interest Only.