For the AIR table on a construction permanent loan where the rate for the permanent phase is not known at closing can we leave the subsequent changes field blank when there is no other rate change except for when the loan switches from interest only period to fixed rate permanent period? Our software provider only gives the ability to show that field blank or a number; it will not produce "No subsequent changes".

There is no specific guidance of what you have to disclose. Since their is no specific guidance, leaving it blank should be acceptable.

Section 1026.37—Content of Disclosures for Certain Mortgage Transactions (Loan Estimate)

1. Disclosures not applicable. The disclosures required by § 1026.37 are required to reflect the terms of the legal obligation between the parties, and if any information necessary for an accurate disclosure is unknown to the creditor, the creditor shall make the disclosure in good faith, based on the best information reasonably available to the creditor pursuant to §§ 1026.17(c) and 1026.19(e). See comments 17(c)(1)-1, 17(c)(2)(i)-1 and -2, and 19(e)(1)(i)-1. Where a disclosure is not applicable to a particular transaction, unless otherwise provided by § 1026.37, form H-24 of appendix H to this part may not be modified to delete the disclosure from form H-24, or to state “not applicable” or “N/A” in place of such disclosure. The portion of the form pertaining to the inapplicable disclosure may be left blank, unless otherwise provided by § 1026.37.

If the permanent start rate is based on a index, I assume you have the required lookback built in to get your adjustment notice out 60 days prior to conversion to the permanent phase.

Appendix D: If the legal obligation for a loan secured by the consumer's principal dwelling provides that the permanent financing interest rate may adjust when the construction financing converts to permanent financing, and such adjustment to the interest rate results in a corresponding adjustment to the payment, the creditor provides the disclosures pursuant to § 1026.20(c), but not (d), if the interest rate for the permanent phase will be fixed after the conversion.

Do we need to provide a CHARM booklet?

I do not believe so as under 1026.19(b) you can treat the transactions separately.

Thank you.