[rcooper]

A question we received from one of our members:

I attended the Integrated mortgage seminar and I am having a loan meeting Friday and have a few questions. On the vacant land and Temporary Construction concerning business loans. I am confused in knowing will we need to give these type of loans earlies?

[rcooper]

The final rule applies to most closed-end consumer mortgage loans. The preamble provides some good discussion on these points. It is linked here beginning on page 28: https://files.consumerfinance.gov/f/201311_cfpb_final-rule-preamble_integrated-mortgage-disclosures.pdf

To answer your question, here are some excerpts from the preamble to the integrated disclosure rules linked above:

P. 1351: …the final rule will apply only to mortgage loans obtained by
consumers primarily for personal, family, or household purposes and the final rule will not apply to loans obtained primarily for business purposes.

P. 231(regarding construction only): The Bureau notes that, while many construction-only loans may not be for a consumer purpose, only those loans made “primarily” for personal, family, or household purposes are covered by the final rule, consistent with the definition of “consumer credit” in Regulation Z § 1026.2(a)(12).

P. 230 (regarding vacant land): the Bureau believes these loans are covered by the integration mandate, and the Bureau believes that the integrated disclosures would be just as useful to a consumer whose closed-end credit transaction is secured by vacant real estate as they would to a consumer whose transaction is secured by real estate with a dwelling. The Bureau believes covering all real estate-secured closed-end consumer credit transactions (other than reverse mortgages) will facilitate industry compliance.

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