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CFPB Releases Resources on TRID for Construction Loans
On Tuesday, January 12, 2016, the CFPB issued a construction loan factsheet providing an overview on how the TILA-RESPA Integrated Disclosure Rule (TRID) applies to these types of loans. At the outset, the Bureau expressly states TRID applies to most construction loans which are secured, closed-end consumer credit transactions. In contrast, open-end loans or those for a commercial purpose lie outside of TRID.
The factsheet states TRID provides lenders with flexibility to provide one or more sets of required disclosures (loan estimate and closing disclosure). Where the lender is offering a multiple-advance loan, covering both the construction phase and permanent phase, it can choose to offer one set of TRID disclosures or it can treat each phase as a separate loan with two sets of disclosures.