Hello,

What is required in order to call a loan an HI loan in order to call it an HI loan and not an HE loan? Is it enough for the consumer to say that the purpose will be home improvement? I am asking about Texas rules. If we disburse the funds directly to the consumer, can we still call it an HI loan?

2nd question - If we hold the funds and disburse them as construction is completed, may we charge interest on the full approved amount of the loan from the time of booking?

Thank you for your help.

A home equity loan would have the be support by a mechanic's lien and a construction contract between the borrower and a third party.

I think you would be risking a usury issue.

I will share this with them.

I appreciate your help. Thank you!