Am I correct that a construction loan to purchase the lot that construction cost show in the adjustment and other credits similar to the following:

Total closing costs: 5,000
Closing costs to be financed: 0
Down payment and other funds from borrower 10,000
Deposit: 0
Funds for borrower: -200,000
Seller credits: 0
Adjustments and other credits: 200,000
Estimated Cash to Close: 15,000

Or does it get factor into the funds from borrower and funds for borrower only?

Total closing costs: 5,000
Closing costs to be financed: 0
Down payment and other funds from borrower 10,000
Deposit: 0
Funds for borrower: 0
Seller credits: 0
Adjustments and other credits: 0
Estimated Cash to Close: 15,000

I will also point out that construction costs will be paid using future draws not put into a separate construction holdback account.

Dan Persfull did a VERY detailed explanation and examples of the different scenarios surrounding disclosure of construction loans.

If I can find it I'll come back and link it, but in the meantime, you may want to consider searching for it yourself!

https://www.bankersonline.com/forum/ubbthreads.php/ubb/showflat/Number/2220816/Searchpage/2/Main/264704/Words/%22construction%22/Search/true/construction-loans-closing-disclosure#Post2220816

https://www.bankersonline.com/forum/ubbthreads.php/topics/2220816 is a lot shorter and becomes a link automatically.

These examples did not show how it would roll up into the cash to close table. How would his example below show in the cash to close table?

Seller

Assumed Transaction:

Lot Purchase - - - - - - - - - - - - - - - - $35,000
Construction Costs - - - - - - - - - - - $240,000
Loan Amount - - - - - - - - - - - - - - - $220,000
Closing Costs - - - - - - - - - - - - - - - - -$3,500

Standard Form

Borrower has made a $20,000 deposit with the builder.

Section K. Due from Borrower at Closing

Line 01 Sale Price of Property - - - - - - - - - - - - - - - - $35,000
Line 03 Closing Costs Paid at Closing (J) - - - - - - - - - $3,500

Adjustments

Line 05 Construction Costs to ABC Builder - - - - - - - - - - - - - - - - - - - $240,000

Section L. Paid Already by or on Behalf of Borrower at Closing

Line 02 Loan Amount - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $220,000
Line 04 Deposit to ABC Builder POC (B) - - - - - - - - - - - - - - - - - - - - - $20,000

Calculations – Borrower’s side

Total Due from Borrower at Closing (K) - - - - - - - - - - - - - - - - - - - - - - $278,500
Total Paid Already by or on Behalf of Borrower at Closing (L) - - - - - - ($240,000)
Cash to Close X From _ To Borrower - - - - - - - - - - - - - - - - - - - - - - - $38,500

Does anyone have any example cash to close tables they can provide for construction loans that involve the purchase of the lot? Thanks in advance.

What does your summaries of transactions look like? That populates the cash to close table and does your origination system not do it automatically? We don't know enough about the transaction to tell you what is correct and what is not.

I have one that I'm about to close on a loan amount of $100,000 with a lot purchase of $17,500

Total CC - $2416.50
Closing Costs Paid before Closing $0
Closing Costs Financed $0
Down Payment/Funds from borrower - $1750
Deposit - [-$2500]

Cash to Close - $1666.50

Like I indicated above - without knowing what the Summaries of Transactions looks like, there is no way to tell if the cash to close table is correct.

I just realized they wanted the example broken down in to the table. I really don't have time to do that for that specific example...I will lay out what my example would show in Summaries:

K01 $17,500
K03 $2,416.50
K04 $84,250 [remainder available to draw]

L02 $100,000

Calculation
$104, 166.50
- 100,000.00

$1,666.50 Cash from

Where is your total construction costs and why would "an available to draw" be in the Summaries of Transactions?

This one did not have a contract. Probably not the best of examples for that reason, but it's the best one sitting in front of me at the moment.

You would still need estimated total construction costs so that the borrower was fully informed of their obligations - POC or not.

The above represents full disclosure, Randy.

17500 lot
84250 construction cost

$1750 down

total loan = $100,000

What should the cash to close table look like when the summary of transactions looks like this?
Seller

Assumed Transaction:

Lot Purchase - - - - - - - - - - - - - - - - $35,000
Construction Costs - - - - - - - - - - - $240,000
Loan Amount - - - - - - - - - - - - - - - $220,000
Closing Costs - - - - - - - - - - - - - - - - -$3,500

Standard Form

Borrower has made a $20,000 deposit with the builder.

Section K. Due from Borrower at Closing

Line 01 Sale Price of Property - - - - - - - - - - - - - - - - $35,000
Line 03 Closing Costs Paid at Closing (J) - - - - - - - - - $3,500

Adjustments

Line 05 Construction Costs to ABC Builder - - - - - - - - - - - - - - - - - - - $240,000

Section L. Paid Already by or on Behalf of Borrower at Closing

Line 02 Loan Amount - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $220,000
Line 04 Deposit to ABC Builder POC (B) - - - - - - - - - - - - - - - - - - - - - $20,000

Calculations – Borrower’s side

Total Due from Borrower at Closing (K) - - - - - - - - - - - - - - - - - - - - - - $278,500
Total Paid Already by or on Behalf of Borrower at Closing (L) - - - - - - ($240,000)
Cash to Close X From _ To Borrower - - - - - - - - - - - - - - - - - - - - - - - $38,500

We have access to two softwares and they both show it differently. Trying to get an idea of which is correct.