We have a customer who is doing one temporary loan that includes the purchase of the lot and the construction of the home. It would be exempt from RESPA because it is temporary financing for construction but there is also a caveat that says "where proceeds are used to transfer title to the first purchaser" it is covered under RESPA. Does the transfer of title apply to only the lot and not a dwelling? Is this subject to RESPA?

If the proceeds from the loan will purchase the lot (transfer title to the first user of the land) and also be used to construct the property, then the loan is RESPA covered.