The loan is to construct a dwelling for sale, so I agreement that these loans would be exempt.
swiggles - that may no longer be the case. If the lender is contemplating a conversion of the construction loan via a modification at the time the construction phases finishes, while the modification would be exempt, the reporting of the construction loan would not be, as it is not temporary financing.
iv. Lender A extends credit to finance construction of a dwelling. The loan automatically will convert to permanent financing extended to the same borrower with Lender A once the construction phase is complete. Under § 1003.3(c)(3), the loan is not designed to be replaced by separate permanent financing extended to the same borrower, and therefore the temporary financing exclusion does not apply.
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