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#2237021 - 05/20/20 04:17 PM Re: APR Tool - Payment Streams Compliance NABW
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Thank you for your responses. Interesting that you can use either option when that can make a material difference in the APR.

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#2253504 - 05/05/21 05:56 PM Re: APR Tool - Payment Streams Compliance NABW
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@Richard . . . There is a trick to construction loans where the Unit Period is calculated a certain way. Being that we discussed going back to the consummation date, do future streams include initial construction unit period calculation even when the loan gets on amortizing monthly payments. So, with an initial 1-year construction phase, you get 6 unit periods. If the Perm Phase starts the month right after the construction is over, then would that stream be 6 Unit Period as well? And, then if you had another stream in 5 years, would that next stream be 66 Unit Periods? Or, would you flip back to months and use 12 and 72?

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#2253505 - 05/05/21 06:00 PM Re: APR Tool - Payment Streams Compliance NABW
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Has anybody used the tool yet on a Construction-Perm one set of disclosures with an ARM feature to the Perm Phase, or even without an ARM feature. I think I remember seeing a thread where people were saying they couldn't get the tool to work right with Construction loans. Are there known issues with the tool for Construction Loans? Getting APR violations and Finance Charge violations vs. the Final CD. Not sure if it is the tool, the inputs being used, or the CD is actually calculated inaccurately.

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#2253509 - 05/05/21 06:36 PM Re: APR Tool - Payment Streams Compliance NABW
rlcarey Online
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I have not checked it recently and I got tired of e-mailing them that they had an error with no response. They were failing to account for the interest during the construction phase. But if I recall it was only on the TIP disclosure. Are you inputting the payment streams correctly?
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#2253515 - 05/05/21 07:12 PM Re: APR Tool - Payment Streams Compliance NABW
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I believe I am inputting them correctly, but not totally sure about the Unit Periods column.

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#2253516 - 05/05/21 07:20 PM Re: APR Tool - Payment Streams Compliance NABW
rlcarey Online
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Are you using the calendars. You do not input the estimated construction interest payments and the unit periods and odd days for your first permanent payment will be half of the construction period plus the period from the end of construction to your first payment date.
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#2253528 - 05/05/21 08:46 PM Re: APR Tool - Payment Streams Compliance NABW
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I did use the calendars. It gave me 6 Unit Periods for the Construction phase and 6 periods for the 1st Payment Stream on the Perm phase. Should then Construction Phase unit period just be '1' since they are making the interest only payment monthly?

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#2253537 - 05/06/21 10:56 AM Re: APR Tool - Payment Streams Compliance NABW
rlcarey Online
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There are no payment streams entered for the construction interest payments. You only enter the payment streams for the permanent phase of the loan. The interest for the construction period is already accounted for and it really does not matter when it is paid within the construction period.

So, if you make a construction loan on 01/05/21 that ends on 01/05/22 - which is 12 unit periods and your first permanent P&I loan payment for $x,xxxx is due 02/05/22, then your unit periods to the first payment would be 12 divided by 2 plus 1, which would give you 7 unit periods to the first payment.
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#2253572 - 05/06/21 04:41 PM Re: APR Tool - Payment Streams Compliance NABW
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It seemed like when I used the calendars it had a payment stream for the Construction phase, but perhaps that was just my own assumption that that is what the payment stream with 6 unit periods represented. Taking it away does pretty much get the APR Tool results closely in line with the Closing Disclosure. So, for a Construction-Perm loan with an ARM feature, let's say a 5/1, you would only have 2 Payment Streams? The first one for the 5-year initial perm phase with the calendar Unit Period calculation (I got 6 periods with 10 odd days). And, then, you would have a 2nd Payment stream representing the ARM adjustment with 66 Unit Periods and the 10 odd days?

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#2253580 - 05/06/21 05:34 PM Re: APR Tool - Payment Streams Compliance NABW
rlcarey Online
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If you have a premium or discounted ARM start rate, that sounds correct.
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#2253584 - 05/06/21 05:53 PM Re: APR Tool - Payment Streams Compliance NABW
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Okay . . . Awesome. Thank you for the back and forth. Appreciate the help.

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#2253618 - 05/06/21 11:25 PM Re: APR Tool - Payment Streams rlcarey
Richard Insley Online
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Originally Posted by rlcarey
If you have a premium or discounted ARM start rate, that sounds correct.
Yes. As a reminder the rule you are following when you do this is Section 1026.17(c)(1), OI #10.
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