Thread Options
#2212693 - 05/02/19 04:14 PM Initial Construction Exemption
Shondra Offline
Member
Joined: Apr 2014
Posts: 89
We are about to start financing temporary loans to purchase a mobile home, prepare the site, and move the mobile home on the site. After the mobile home is affixed to the site, we will then be paid off by the permanent financing creditor. It appears these loans are triggering HOEPA requirements due to the short term of the loan (six months). The lender calls these "interim construction" loans, but is my opinion that these are not considered construction loans for the purpose of this reg and will not be exempt from HOEPA. Am I correct?
Last edited by Shondra; 05/02/19 06:27 PM.
Return to Top
HOEPA and Homeowner Counseling Rule
#2212863 - 05/06/19 02:19 PM Re: Initial Construction Exemption Shondra
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,277
Galveston, TX
The purchase of a manufactured home is not the initial construction of a dwelling, if that is what you are asking.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2212876 - 05/06/19 04:44 PM Re: Initial Construction Exemption Shondra
Shondra Offline
Member
Joined: Apr 2014
Posts: 89
Thanks. The lender also mentioned we may also provide temporary financing for modular homes. Would these qualify as initial construction, since they are partially constructed off site and then assembled and finished on site?

Return to Top
#2212889 - 05/06/19 06:01 PM Re: Initial Construction Exemption Shondra
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,277
Galveston, TX
That would be a CFPB question. It's a very grey area on which I have never seen any guidance. Maybe someone else has?
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2212896 - 05/06/19 06:34 PM Re: Initial Construction Exemption Shondra
Shondra Offline
Member
Joined: Apr 2014
Posts: 89
Thanks, I will try submitting a question to them.

Return to Top
#2213824 - 05/16/19 07:44 PM Re: Initial Construction Exemption Shondra
Shondra Offline
Member
Joined: Apr 2014
Posts: 89
Update: I received a call from a CFPB staff attorney regarding my question. She agreed that the modular home interim loans could be classified as construction loans as long as they were temporary loans that would be replaced with a separate permanent loan. She of course stated that this was only her opinion and this opinion could not be taken as legal advice.

Return to Top