If we originate a C2P loan (12 month construction with 30 year amortization), when do we have to start escrowing for flood insurance? Does the construction period fall under the temporary financing exemption even if we disclose the full 31 year loan term at origination?

I see no exemption for the construction period on a one time close construction loan in the regulations.

Thank you. That is what I was thinking but our secondary mortgage market unit (who has a C2P program already in place), somehow has the borrower pay the flood premium up front but doesn't start the escrow portion until the home is completed and they modify the loan to the amortized schedule. I don't know how they do that and I have yet to get an answer for anyone. I don't understand how the loans are being purchased by investors with that happening. I'm having another compliance person research on the purchasing bank side but she hasn't responded back to me.