ATR QM rule does not apply to Construction loans of 12 months or less. On a 12 month construction only loan with monthly interest only payments and a balloon payment due in month 12, how is the 12 month term being measured? This is a question for those of you who currently do construction only loans. Interested in how the maturity date on the docs is calculated. Is it similar to a typical run of the mill doc package? Or does the 12 month maturity date run from the note date?

Day of closing to maturity date.

Thank You! We are in AZ. By Closing date, are you referring to the day the docs are signed or the day the loan funds?

The day the legal obligation is signed,

Another question for you: Since this is a 12 month interest only. Monthly Payments of interest only with the 12 payment being a balloon payment that consists of principal and interest. Based on my research, this would be disclosed as "11 mo. Interest Only Fixed Rate". Am I understanding this correctly?

If so, I have a Second question: We are in AZ. The maturity date on the docs may be less than 12 months since the borrower's signing date may move. Would that mean that the product description on the CD is inaccurate if the product is described as 12 mos?

This would be disclosed as "11 mo. Interest Only Fixed Rate".

That is correct.

If your signing date is moving, would you not reprint your closing package and update your CD? How would your finance charge and APR be correct if you are moving the signing and funding dates and not the maturity date?

No. It is fairly common in dry states for signing dates to be later than the date of the closing docs. No redraw of closing docs would be required on the non-construction loan programs. Are you saying this would require a redraw for a construction only loan?

I am just asking the question that if you are delaying funding and you only charge interest from the funding date, how is your finance charge and APR accurate on your disclosures. When your documents are signed is a State law issue.

We disclose in good faith based. If there is a change, we will re-disclose the CD. But per diem interest may change. It does quite frequently.

Then I guess the product description would fall under the same category.