Lot loans & the Loan Estimate


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    I am not clear on when the Loan Estimate is required on land loans. Currently there is the 25 acre exemption as well as land only with none of the proceeds used to finance the construction of a permanent residence. I understand that as of August 1, 2015, 25 acres is no longer an exemption, but if the purpose of the application is for a consumer to purchase a residential lot, none of the proceeds being used for construction of a permanent residence, is the Loan Estimate required?


    Yes, the loan estimate would be required in this situation.

    From the preamble of the Integrated Disclosures final rule (p. 230):
    [T]he Bureau believes covering all real estate-secured closed-end consumer credit transactions (other than reverse mortgages) will facilitate industry compliance. Under the final rule, creditors will not have to determine whether the property includes a dwelling or if the loan proceeds will be used to construct a dwelling within two years from the date of the settlement of the loan before or upon receipt of an application to determine whether a Loan Estimate must be provided.

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