My question is regarding which loans are exempt from this test. Loans to finance the initial construction are exempt, but other temporary financing loans are not listed, such as a bridge loan, or a 1 year loan made if more time was needed to complete construction. So my question is if these other types of temporary financing/1 year loans are also exempt from HOEPA test, or only the 1st initial construction loan?
If a loan is to finance the initial construction of a dwelling it is exempt from the High Cost Mortgage requirements. Otherwise, unless it meets one of the other exemptions in 1026.32(a)(2)(listed below), it is not exempt.
(2) Exemptions. This section does not apply to the following:
(i) A reverse mortgage transaction subject to § 1026.33;
(ii) A transaction to finance the initial construction of a dwelling;
(iii) A transaction originated by a Housing Finance Agency, where the Housing Finance Agency is the creditor for the transaction; or
(iv) A transaction originated pursuant to the United States Department of Agriculture’s Rural Development Section 502 Direct Loan Program.