Construction/Perm Loan and Rescission

Would a rescission be required at a one time construction to Perm loan closing? Technically they are not in their primary residence at time of loan closing.

Thank you

If you are only taking the home being constructed (and I'm assuming ground-up), then rescission would not be required.

Because they are not in their primary residence at time of loan closing, correct?

Because they are not in their primary residence at time of loan closing, correct?

No. It's because a construction only loan and the permanent financing replacing the construction loan meets the definition of a Residential Mortgage Transaction and RMTs are exempt from rescission.

That makes sense, thanks for the help.

As Dan said, this is a RMT. Read the definition of RMT in the regulation and commentary in §1026.2*(a)(24) - specifically comment #4:
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/2/

Then read the RofR rules and how it doesn't apply to RMT - specifically §1026.23(f)(1):
https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1026/23/

I regularly refer to these myself.

Thanks for the info everybody. Another question regarding this issue. What if customer has a construction loan that gets modified or even "refinanced" into permanent financing? The loan wasn't a one time construct/perm closing. And what if the new loan for permenant has a new loan number, new app, new docs, new everything? Still a Residential Mortgage Transaction by acquiring the primary residence?

Not to be harsh, but it is all explained in the commentary to the links David posted.

Ok, I'll go back and take another look.