In a single close construction to perm 5/6 variable rate loan with a 12 month construction period, is the construction period counted in the initial fixed rate period when determining which APOR chart to use? So in the example would we use the APOR for a 3-year ARM or a 5-year ARM? Does it matter if the construction period is greater than 12 months?

Making that determination references back to 1026.32:

When the creditor discloses the two phases as a single transaction, a single annual percentage rate, reflecting the appropriate charges from both phases, must be calculated for the transaction in accordance with § 1026.32(a)(3) and appendix D to part 1026. This annual percentage rate must be compared to the average prime offer rate for a transaction that is comparable to the permanent financing to determine coverage under § 1026.32.

So, you use only the permanent phase to determine your comparable transaction.

If you are talking about QM qualifications, if your construction loan is for more than 12 months, then you cannot ignore the fact that you have an interest only period which relegates treating the loan under standard ATR requirements, as it will wash out of any QM categories.

This not a construction loan but would you select a 5 year APOR for an ARM loan that starts out with 5 years of interest only payments in order to calculate rate spread? It is a 30 year 5/1 ARM product.