This is a construction on land owned transaction, so this would not be considered a purchase. We are disclosing on a Standard Loan Estimate. We are having some back and forth with our vendor, and I don't think they are disclosing the Calculating Cash to Close section correctly.
In the Down Payment/Funds to Borrower section, our vendor includes the value of the land and the difference in cost of construction and loan amount the customer is responsible for. The value of the land is also netted out in the Adjustments and Other Credits, so it's a wash.
The final Estimated Cash to Close number is the cost of construction minus the loan amount, plus the total closing costs.
I feel this is incorrect. If there is no money owned on the existing land, shouldn't the amount held back for construction be included in the total closing costs, and subtracted from the loan amount to give us the final Estimate Cash to Close? I can't help but feel our vendor is making this more complicated than it should be.
Keep calm, and let the compliance officer handle it....