[TheBank]

Do consumer purpose closed end loans made for the purpose of constructing a dwelling fall under the application, note, and security instrument requirement for the NMLS #? The home is not built yet and is not a dwelling yet, but is in process of becoming a dwelling so I have told staff yes and want to double check this.

[rcooper]

I believe your interpretation is correct. The proposed definition of dwelling was adopted in the final rule. Here is an excerpt from the proposed rule on what constitutes as dwelling, p.55329:
The Bureau believes the definition of ‘‘dwelling’’ in § 1026.2(a)(19) is consistent with TILA section 103(cc)(5)’s use of the term in the definition of ‘‘residential mortgage
loan.’’ Section 1026.2(a)(19) defines ‘‘dwelling’’ to mean ‘‘a residential structure that contains one to four units, whether or not that structure is attachedto real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.’’ The Bureau interprets the term ‘‘dwelling’’ to also include dwellings in various stages of construction. Construction loans are often secured by dwellings in this fashion. Indeed, draws to fund construction are usually released in
phases as the dwelling comes into existence and secures the draws. Thus, improvement through various stages of construction that will be used as a residence is secured by a ‘‘dwelling.’’ The Bureau proposes to maintain this definition of dwelling.

[Author]

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