I have been looking at lots of posts about this and am still a little unclear on 2 things - Construction loan - proceeds will buy the lot - we have not provided firm commitment for end financing and there is no 'take-out' commitment from another lender.

1. Loan is subject to RESPA [because we 'may' provide financing if another bank does not] and is still considered temp financing and not HMDA reportable, but Gov't Monitoring Information would not be collected. Customer would receive the HUD booklet, the GFE and the Servicing Disclosure. IS this a true statement?
2. Now comes the loan for the perm financing. It will be an ARM. Do I have to give a new GFE, new Servicing Disclosure & early TIL[I know I have to give Early ARM disclousure]and then collect GMI on a separate form, since I will be using the orginal application submitted for the construction loan?
.........I used to like RESPA!!!

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.........I used to like RESPA!!!

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If you may provide permanent financing, all disclosures for both the construction phase and the permanent phase must be given at the time of the original application, or within the 3 business days.

even the HUD booklet?

Yep.

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If you may provide permanent financing, all disclosures for both the construction phase and the permanent phase must be given at the time of the original application, or within the 3 business days.

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WAIT! - are you saying I have to supply both sets of disclosures at time of the application for the construction loan??????

Right again.

See, you just thought you use to like RESPA.

I'm still questioning this - wouldn't the customer think we had -in fact- approved the perm financing if we supply disclosures - remember, we only "may" supply the perm financing

The key word is may.

3500.5

(3) Temporary financing. Temporary financing, such as a construction loan. The exemption for temporary financing does not apply to a loan made to finance construction of 1- to 4-family residential property if the loan is used as, or may be converted to , permanent financing by the same lender or is used to finance transfer of title to the first user.

PS: Our GFEs have a disclaimer that it is not a commitment to make a loan.

Dan - if the borrower already owns the lot at the time the construction loan is made (permanent financing will be taken out by another lender), then is this loan still exempt from RESPA since we will not be using proceeds to purchase the lot? Hasn't transfer of title to first user already taken place if they own the lot? Our loan is a 12 month loan to purchase the lot and then another 12 month loan for the construction with perm financing with another mortgage lender. Thank you.

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Our loan is a 12 month loan to purchase the lot and then another 12 month loan for the construction with perm financing with another mortgage lender. Thank you.

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You are correct that if the lot is already owned by the "first user", then the exemption applies.

The above statement confused me a little, so I want to make sure my assumptions are correct.

The first 12 month loan is to purchase the lot, no proceeds to begin construction.

The second 12 month loan is to begin construction, with a take out commitment from another financial institution.

If those assumptions are correct, both loans would be exempt.