CONSUMER FINANCIAL PROTECTION BUREAU | DECEMBER 2019
TILA
-RESPA Integrated
Disclosures for
Construction Loans
Guide for
separate construction and permanent phase
disclosures
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The Bureau updates this Guide on a periodic basis to reflect finalized clarifications to the rule
which impacts Guide content, as well as administrative updates. Below is a version log noting
the history of this document and its updates:
Version
Log
Date Version Changes
December 2019 1.0 Original Document
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Version Log ................................................................................................................. 1
Table of contents......................................................................................................... 2
Introduction ................................................................................................................. 3
About construction loan disclosures ........................................................................ 4
Separate or combined disclosures..................................................................... 4
How to estimate disclosures for construction loans ......................................... 5
Completing construction loan disclosures ............................................................. 10
1. Loan Terms Table ................................................................................................... 11
2. Projected Payments Table ...................................................................................... 31
3. Loan Costs Table ................................................................................................... 36
4. Adjustable Payments (AP) Table ........................................................................... 39
Additional resources ................................................................................................. 43
Table
of contents
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This Guide and the
TILA-RESPA Integrated Disclosures: Combined Construction Loan
Disclosure Guide (Companion Guide) work with other general TRID resources, including the
TILA-RESPA Integrated Disclosure Small Entity Compliance Guide (TRID Small Entity
Compliance Guide) and the TILA-RESPA Integrated Disclosure Guide to the Loan Estimate and
Closing Disclosure Forms (TRID Guide to Forms), to review how to provide particular
disclosures on the TRID forms for construction-only and construction-permanent loans.
Both construction-only loans (i.e., usually shorter term loans with several fund disbursements
where the consumer pays only accrued interest until construction is completed) and also
construction-permanent loans (i.e., construction loans that convert to permanent financing once
construction is completed in which the loan amount is amortized just as in a standard mortgage
transaction) can be covered by the TILA-RESPA Rule (TRID Rule) if the general TRID coverage
requirements are met. Comment 17(c)(6)-2. Additionally, both initial construction and
subsequent construction can be covered by the TRID Rule. Comment 17(c)(6)-2.
The Construction Guides are not a complete review of the TRID Rule, but instead highlight
particular sections of the disclosures based on the questions received by the Bureau. At the end
of this Guide, there is more information about the TRID Rule and related implementation
support from the Bureau that can support any of the other pieces not addressed by these guides.
This Guide pertains to compliance with the TRID Rule, but it is not a substitute for the rule.
Only the rule and its Official Interpretations (also known as commentary) can provide complete
and definitive information regarding its requirements. The discussions below provide citations
to the sections of the TRID Rule on the subject being discussed. Keep in mind that the Official
Interpretations, which provide detailed explanations of many of the TRID Rule’s requirements,
are found after the text of the rule and its appendices. The interpretations are arranged by rule
section and paragraph for ease of use.
Introduction
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There are two concepts that impact how the TRID Rule applies to construction loans. As
discussed in the remainder of this Guide, each of the concepts below will impact how a creditor
discloses a construction loan under the TRID Rule. The first is whether the creditor choses to
use separate disclosures, as discussed in this Guide, or combined disclosures, as discussed in the
Companion Guide. The second is whether the creditor chooses to use Appendix D to Regulation
Z to estimate certain disclosures.
Below is a discussion of these disclosure options to provide background before reviewing how
they impact the TRID disclosures in the rest of this Guide and the Companion Guide.
Using separate or combined disclosures
Under Regulation Z, 12 CFR § 1026.17(c)(6)(ii), a creditor may treat a construction-permanent
loan as either one, combined transaction or as two or more separate transactions.
If the creditor treats the loan as one, combined transaction, the creditor discloses both the
construction and the permanent financing combined on each disclosure. If the creditor treats
the loan as separate transactions, it provides a separate set of disclosures for each phase of the
construction-permanent loan.
Further, § 1026.17(c)(6)(i) permits the creditor to disclose a multiple-advance construction
phase as one transaction, or as a separate transaction for each advance in the construction
phase.
About construction loan
disclosures
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Applying all of these concepts together, as stated in Comment 17(c)(6)-3 to the TRID Rule, a
creditor has the option to disclose a multiple-advance construction-permanent loan with:
One, combined Loan Estimate and one, combined Closing Disclosure; or
Two or more Loan Estimates for each phase and two or more Closing Disclosures for
each phase (for example, one set for the construction financing as a whole and one set for
the permanent financing).
The ability to separate these transactions into two or more disclosures under § 1026.17(c)(6) is
available regardless of whether the consumer initially applies for construction-only or both
construction and permanent financing at application. But note that if the creditor receives a
consumer’s application (i.e., the six pieces of information identified in § 1026.2(a)(3)) for both
the construction financing and the permanent financing, disclosures for both phases must be
given within the timing provided in § 1026.19(e) and (f). Comment 19(e)(1)(iii)-5.
This Guide focuses on disclosing with separate sets of disclosures. Information on disclosing
with one, combined Loan Estimate and one, combined Closing Disclosure is available in the
Companion Guide.
How to estimate disclosures for construction
loans
Creditors must first estimate disclosures based on the best information reasonably available
when the actual term is unknown to the creditor at the time disclosures are made. This applies
to any loan covered by TRID, including construction and construction-permanent loans.
Comments 19(e)(1)(i)-1 and 19(f)(1)(i)-2.
However, as an alternative for construction and construction-permanent loans, the creditor may
use estimation methods identified in Appendix D to Regulation Z to estimate disclosures for the
construction phase. Appendix D can be used in both separate and combined disclosures for
construction and construction-permanent loans.
For certain construction or construction-permanent loans, the creditor knows the disbursement
schedule for the construction loan, and must base disclosures on the timing and amount of these
disbursements. However, in many construction or construction-permanent loans that schedule
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is unknown, resulting in the loan balance and the payment due on a particular date being
unknown. Because of this, some disclosures require estimation.
In the case of an unknown schedule of advances, the creditor may estimate a schedule as well as
the outstanding loan balance, interest, and periodic payments, all based on the best information
reasonably available at the time of the disclosure and provide those disclosures accordingly.
Alternatively, the creditor may use the calculation methods in Appendix D to estimate interest
on the loan, which is then used to estimate the other disclosures on the Loan Estimate and
Closing Disclosure, such as the finance charge and the periodic payment.
Using Appendix D to estimate disclosures
Appendix D is divided into two parts:
Part I for separate disclosures. This part may be used for construction-only loans and
for construction-permanent loans where the creditor discloses each phase separately.
Part II for combined disclosures. This part may be used for construction-permanent
loans where the creditor chooses to provide combined disclosures.
For both parts of Appendix D there are two methods for estimating interest on the loan. The
methods are based on how the creditor is calculating interest:
INTEREST ON THE AMOUNT
ADVANCED
OR
INTEREST ON THE ENTIRE
COMMITMENT
Method:
The creditor assumes ½ the
commitment amount is outstanding
for the entire construction period and
multiplies that amount by the
applicable contract interest rate.
The creditor can calculate the amount
of interest payable during the
construction phase by multiplying the
entire commitment amount by the
applicable contract interest rate for the
construction phase.
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The calculation of the construction
financing periodic payments using the
assumptions in Appendix D produces
interest-only periodic payments that
are equal in amount for a given
interest rate.
The calculation of the construction
financing periodic payments using the
assumptions in Appendix D produces
interest-only periodic payments that
are equal in amount for a given
interest rate.
When
to use:
This approach is permissible if interest
is payable only on the advanced
amount for the time it is outstanding
during the construction phase. It
allows creditors to estimate the
amount of interest payable during the
construction phase.
This approach is permissible if interest
is payable on the entire commitment
amount without regard to the dates or
amounts of actual disbursements.
Citation:
Appendix D, part I.A.1, Example A at
the end of Part I of Appendix D, part
II.A.1, and Comment App. D-7.iv.A.
Appendix D, part I.B.1, Example B at
the end of Part I of Appendix D, and
part II.A.2.
Example
Loan Commitment Amount: $50,000
Interest Rate: 10.5%
Construction Phase: 5 months
Periodic Payment Frequency: Monthly
ADVANCED
INTEREST ON THE ENTIRE
COMMITMENT
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the entire construction phase (i.e.,
½ the commitment amount), the
monthly and total interest for the
construction phase is $218.75 and
$1,093.75, respectively, if, based
on the best information reasonably
available at the time of the
disclosure, interest will be
determined by dividing the interest
rate by 12.
Assuming $50,000 outstanding for
the entire construction phase (i.e.,
the entire commitment amount) the
monthly and total interest for the
construction phase is $437.50 and
$2,187.50, respectively, if, based on
the best information reasonably
available at the time of the
disclosure, interest will be
determined by dividing the interest
rate by 12.
Ultimately, Appendix D provides an estimated interest amount, which can then be used to
estimate the periodic payment. Note that the creditor may be required to do different or further
calculations depending on the basis on which interest is determined (e.g., daily, weekly, every
two weeks) or if the periodic payment is not interest-only.
Estimating other disclosures
Using the interest payment amount estimated with Appendix D, Appendix D and its
commentary also provides methods for how the creditor is permitted to estimate:
The APR;
The Total of Payments; and
The Amount Financed for purposes of the disclosures.
Additionally, the commentary to Appendix D provides additional details on how to complete
TRID disclosures for construction and construction-permanent loans. These disclosures
include:
The Loan Term;
The Loan Product;
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The Interest Rate; and
The Projected Payments Table.
The added Appendix D commentary also provides additional details on how to comply with the
TRID Rule for issues specific to construction financing, such as disclosing increases in the
periodic payment when using the Appendix D methods of calculation for disclosures, or where
to disclose construction costs and inspection and handling fees (including draw fees) for the
construction loan disbursements. Comment App. D-7.
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Using the concepts discussed above, a creditor can apply the TRID Rule to construction and
construction-permanent loans.
The remainder of this Guide provides elaboration on applying those concepts and the TRID Rule
to separate construction-only and construction-permanent loan disclosures. It does not cover
the entirety of the Loan Estimate or Closing Disclosure. Instead, it provides an overview of
select disclosures based on the common questions received by the Bureau pertaining to the:
1. Loan Terms Table
2. Projected Payments Table
3. Loan Costs Table
4. Adjustable Payments Table
Completing construction loan
disclosures
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1. Loan Terms Table
The Loan Terms Table includes information about the Loan Amount, Interest Rate, Periodic
Principal & Interest Payment, Prepayment Penalty, and Balloon Payment. 12 CFR § 1026.37(b).
The following focuses on the Interest Rate and Periodic Principal & Interest Payment
disclosures, the most common questions received by the Bureau.
For more information on the Loan Terms Table disclosures, see section 2.2.2 of the Guide to
Forms.
Interest Rate Disclosure
As part of the Interest Rate disclosure in the Loan Terms Table, the creditor includes the initial
interest rate applicable at consummation, a “YES” or “NO” statement as to whether the interest
rate may increase after consummation, and, if “YES” is disclosed, four bullet point disclosures
providing more detail on the adjustment.
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Initial Interest Rate
Regulation Z, 12 CFR § 1026.37(b)(2) requires the creditor to disclose the interest rate that will
be applicable at consummation.
Construction Phase
The interest rate is the interest rate applicable to the construction financing at consummation.
12 CFR § 1026.37(b)(2); Comment App. D-7.iii.
Permanent Phase
The interest rate is the interest rate applicable to the permanent financing at consummation.
12 CFR § 1026.37(b)(2); Comment App. D-7.iii. If the permanent phase rate is unknown at
consummation, Comment App. D-7.iii allows the creditor to disclose the fully-indexed rate
pursuant to the legal obligation.
For purposes of this permanent phase disclosure, the fully-indexed rate means the interest rate
calculated using the index and margin at the time of consummation. 12 CFR § 1026.37(b)(2);
Comment App. D-7.iii.
Example
For example, if the permanent phase has a fixed rate that will not be set until the
construction phase converts to the permanent phase, Comment App. D-7.iii
allows the creditor to disclose the fully-indexed rate pursuant to § 1026.37(b)(2)
and its commentary.
Note that the index and margin are components of the formula that computes
the interest rate as disclosed at or before consummation and will be, based on
the best information reasonably available at the time of the disclosure, used at
conversion to determine the rate.
For example, the formula used at conversion for a fixed rate loan may be based
on the Fannie Mae required net yield.
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Increase
The creditor is also required to disclose whether or not the interest rate may increase after
consummation under the terms of the loan. 12 CFR § 1026.37(b)(6). A creditor must make this
disclosure based on the terms of the legal obligation, and if any information necessary for an
accurate disclosure is unknown to the creditor, the creditor must make the disclosure in good
faith, based on the best information reasonably available to the creditor. Comments 37-1 and
38-1. A creditor may assume that the consumer will abide by the terms of the legal obligation
throughout the term of the transaction. Comment 17(c)(1)-1.
Construction Phase
A “YES” or “NO” disclosure is provided depending on whether the construction phase interest
rate may increase after consummation of and during the construction phase. 12 CFR
§ 1026.37(b)(6).
A “NO” disclosure is required if the interest rate cannot increase after consummation under the
terms of the legal obligation during the construction phase. 12 CFR § 1026.37(b)(6).
A “YES” disclosure is required if there is a possibility under the terms of the legal obligation that
the interest rate may increase during the construction phase. 12 CFR § 1026.37(b)(6).
Permanent Phase
A “YES” or “NO” disclosure is provided depending on whether the permanent phase interest rate
may increase after consummation of the permanent phase. 12 CFR § 1026.37(b)(6). This would
be irrespective of changes to the construction interest rate.
A “NO” disclosure is required if the interest rate cannot increase after consummation under the
terms of the legal obligation during the permanent phase. 12 CFR § 1026.37(b)(6).
A “YES” disclosure is required if there is a possibility under the terms of the legal obligation that
the interest rate may increase during the permanent phase. 12 CFR § 1026.37(b)(6).
The permanent phase interest rate disclosed at or before consummation may increase after
consummation of the permanent phase if, for example, the permanent phase is an adjustable or
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step rate loan without caps to prevent it from increasing beyond the permanent phase interest
rate disclosed at or before consummation.
Example
For example, the construction and permanent phases are consummated
simultaneously and the interest rate for the permanent phase is an unknown,
fixed rate at consummation that will not be set until the construction phase
converts to the permanent phase, without caps to prevent it from increasing
beyond the permanent phase interest rate disclosed at or before consummation.
In this example, the creditor also discloses “YES.” This is disclosed because,
even though the fixed rate will not change once set, the interest rate may
increase after consummation given it is not set until conversion and in this
scenario there are no methods to prevent a rate higher than the permanent
phase interest rate disclosed at or before consummation.
Bullets
In addition to disclosing whether the interest rate may increase after consummation of the
construction or permanent phase, if the interest rate may increase additional bullet disclosures
are required and must include:
The frequency of adjustments and timing of the first adjustment;
The maximum interest rate and when this may occur;
A reference to the Adjustable Interest Rate (AIR) Table; and
If the loan term may also increase based on the interest rate adjustments, a fourth bullet
is required disclosing that fact and the maximum possible loan term.
12 CFR § 1026.37(b)(6)(ii).
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The following sections discuss the first and second bullet points in this list.
Adjustment Frequency and Timing
If the interest rate may increase after consummation for a construction only or construction-
permanent loan, the creditor must disclose its frequency of adjustments and timing of the first
adjustment in the first bullet for the interest rate disclosure in the Loan Terms Table. 12 CFR
§ 1026.37(b)(6) and (b)(6)(ii).
For separate disclosures, it is the frequency and timing of the first adjustment in the phase being
disclosed. If the interest rate may adjust at multiple intervals, such as multiple interest rate
adjustments during the construction phase or at conversion to the permanent phase and also at
regularly scheduled rate adjustments in that permanent phase, the creditor is required to
disclose only the frequency and timing of the first adjustment in that phase in the first bullet.
Comment 37(b)(6)(ii)-2.
Construction Phase
The construction phase disclosure includes the frequency and timing of any interest rate
adjustments after consummation of and during the construction phase. 12 CFR
§ 1026.37(b)(6)(ii).
Permanent Phase
The permanent phase disclosure includes the frequency and timing of any interest rate
adjustments after consummation of the permanent phase. 12 CFR § 1026.37(b)(6)(ii). This
would be irrespective of changes to the construction interest rate.
EXAMPLE OF A COMPLIANT DISCLOSURE FOR THE ADJUSTMENT FREQUENCY AND
TIMING BULLET
For each example, assume:
Construction Phase: The construction phase is 10 months.
Consummation Timing: The loan for the permanent phase (if any) is consummated
simultaneously with the loan for the construction phase.
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Interest Rate Adjustments: Any interest rate adjustments occur no more frequently
than monthly.
Interest Rate Caps: There are no caps that prevent the interest rate from increasing
beyond the interest rate disclosed at or before consummation.
LOAN
SITUATION
WHEN IT APPLIES
CONSTRUCTION
PHASE
DISCLOSURE
(COMMENT 37(b)(6)(ii)-1;
COMMENT 37(b)(6)-1)
PERMANENT
PHASE
DISCLOSURE
(COMMENT 37(b)(6)(ii)-1;
COMMENT 37(b)(6)-1)
Unknown fixed
permanent
phase interest
rate
The construction phase
has a known fixed rate,
the permanent phase
interest rate is fixed but
unknown until it is
identified at conversion to
the permanent phase, and
the permanent phase
interest rate may increase
from the interest rate
disclosed at or before
consummation.
Nothing for a separate
construction phase
disclosure because the
known fixed
construction phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
“Adjusts once starting
in mo. 1”
Adjustable rate
construction
phase
The construction phase
has an adjustable rate
that may increase after
consummation and
adjusts monthly beginning
in month 1.
“Adjusts every mo.
starting in mo. 1”
Nothing, so long as the
permanent phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
Adjustable rate
permanent
phase
The construction phase
has a fixed rate, but the
permanent phase has an
adjustable rate that
adjusts yearly beginning
in the first month of the
permanent phase.
Nothing for a separate
construction phase
disclosure because the
fixed construction phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
“Adjusts every year
starting in mo. 1”
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Maximum Interest Rate and Timing
If the interest rate may increase after consummation of a construction or construction-
permanent loan, in the second bullet for the interest rate disclosure in the Loan Terms Table the
creditor must disclose the maximum interest rate and the first date when this maximum interest
rate may occur in this bullet. 12 CFR § 1026.37(b)(6)(ii).
For separate disclosures, it is the maximum interest rate that may occur within the phase being
disclosed.
Construction Phase
The construction phase disclosure discloses the maximum interest rate that may occur after
consummation of and during the construction phase, and when that may occur. 12 CFR
§ 1026.37(b)(6)(ii).
Permanent Phase
The permanent phase disclosure discloses the maximum interest rate that may occur after
consummation of and during the permanent phase, and when that may occur. 12 CFR
§ 1026.37(b)(6)(ii). This would be irrespective of changes to the construction interest rate.
EXAMPLE OF A COMPLIANT DISCLOSURE FOR MAXIMUM INTEREST RATE AND TIMING
BULLET
For each example, assume:
Construction Phase: The construction phase is 10 months.
Consummation Timing: The loan for the permanent phase is consummated at the
same time as the loan for the construction phase.
Interest Rate Adjustments: Any interest rate adjustments occur no more frequently
than monthly.
Interest Rate Caps: The construction phase interest rate has a cap at 8% (or is 8% for
fixed rate examples), and the permanent phase (if any) has a cap at 10% (or is 10% for
fixed rate examples).
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LOAN SITUATION WHEN IT APPLIES
CONSTRUCTION
PHASE DISCLOSURE
(COMMENT 37(b)(6)(ii)-1;
COMMENT 37(b)(6)-1)
PERMANENT PHASE
DISCLOSURE
(COMMENT 37(b)(6)(ii)-1;
COMMENT 37(b)(6)-1)
Unknown
permanent phase
interest rate
The permanent phase
interest rate is fixed
but unknown until it is
identified at
conversion to the
permanent phase, and
it may increase from
the interest rate
disclosed at or before
consummation.
Nothing for a separate
construction phase
disclosure, so long as the
construction phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
“Can go as high as
10% in mo. 1”
Adjustable rate
construction
phase
The construction
phase has an
adjustable rate that
may increase after
consummation and
adjusts monthly
beginning in month 1.
“Can go as high as 8% in
mo. 1”
Nothing for a separate
permanent phase
disclosure, so long as
the permanent phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
Adjustable rate
permanent phase
The construction
phase has a fixed
rate, but the
permanent phase has
an adjustable rate that
adjusts yearly
beginning in the first
month of the
permanent phase.
Nothing for a separate
construction phase
disclosure because the
fixed construction phase
interest rate cannot
increase from the rate
disclosed at or before
consummation.
“Can go as high as
10% in mo. 1”
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Periodic Principal and Interest Payment
Disclosure
As part of the Periodic Principal and Interest Payment disclosure in the Loan Terms Table, the
creditor includes the initial periodic payment applicable at consummation, a “YES” or “NO”
statement as to whether the periodic payment may increase after consummation, and, if “YES”
is disclosed, four bullet point disclosures providing more detail on the adjustment.
Initial Periodic Principal and Interest Payment
Section 1026.37(b)(3) requires the creditor to disclose the initial periodic principal and interest
payment that will be due under the terms of the legal obligation.
Construction Phase
The periodic payment is the amount due in the first periodic payment for the construction
phase. If this amount is unknown, the creditor may estimate the amount based on the best
information reasonably available to the creditor or use Appendix D to estimate the periodic
payment. 12 CFR § 1026.37(b)(3); Appendix D.
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Permanent Phase
The disclosed permanent phase periodic payment is the amount determined in accordance with
the permanent phase contract. If the periodic payment is unknown at the time of the disclosure
because, for example, the permanent phase is consummated simultaneously with the
construction phase and the permanent phase interest rate will remain unknown until conversion
to the permanent phase, the periodic principal and interest disclosure is based on the fully-
indexed interest rate at the time of consummation. 12 CFR § 1026.37(b)(3).
Note
For purposes of this disclosure, the fully-indexed rate means the interest rate
calculated using the index and margin at the time of consummation. 12 CFR
§ 1026.37(b)(2) and (3).
Note that the index and margin are components of a formula that establishes the
interest rate disclosed at or before consummation and will be, based on the best
information reasonably available at the time of the disclosure, used at conversion
to determine the rate.
For example, the formula used at conversion for a fixed rate loan may be based on
the Fannie Mae required net yield.
Increase
The creditor is also required to disclose a “YES” or a “NO” for whether the payment may
increase after consummation under the terms of the loan. 12 CFR § 1026.37(b)(6).
A creditor complies by disclosing based on the terms of the legal obligation and may assume that
the consumer will abide by the terms of the legal obligation throughout the term of the
transaction. Comment 17(c)(1)-1.
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Construction Phase
A “YES” or “NO” disclosure is provided depending on whether the periodic payment may
increase after consummation and during the construction phase. 12 CFR § 1026.37(b)(6).
A “NO” disclosure is required if the payment cannot increase after consummation under the
terms of the legal obligation during the construction phase. 12 CFR § 1026.37(b)(6).
A “YES” disclosure is required if under the terms of the legal obligation the payment amount
may increase after consummation during the construction phase. 12 CFR § 1026.37(b)(6).
Unless the creditor knows under the terms of the legal obligation that the payments cannot
increase after consummation, the creditor must disclose “YES” even if, for example, the creditor
is estimating payments that are equal in amount using Appendix D. Comment App. D-7.iv.
Permanent Phase
A “YES” or “NO” disclosure is provided depending on whether the permanent phase periodic
payment may increase after consummation of the permanent phase. 12 CFR § 1026.37(b)(6).
This would be irrespective of changes to the construction periodic payment.
A “NO” disclosure is required if the payment cannot increase after consummation under the
terms of the legal obligation during the permanent phase. 12 CFR § 1026.37(b)(6).
A “YES” disclosure is required if the payment may increase after consummation under the terms
of the legal obligation during the permanent phase. 12 CFR § 1026.37(b)(6).
Example
For example, if the permanent phase is consummated simultaneously with the
construction phase and the permanent phase has a fixed rate that will not be set
until the construction phase converts to the permanent phase, a creditor discloses
“YES” if the interest rate could cause the periodic payment to increase beyond the
permanent phase periodic payment disclosed at or before consummation.
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Bullets
If under the terms of the legal obligation the payment amount may increase after
consummation, § 1026.37(b)(6)(iii) requires several bulleted disclosures with the initial periodic
principal and interest payment disclosure including:
The frequency of adjustments and timing of the first adjustment;
The maximum possible payment and date the payment may first reach the maximum;
The timing of any interest-only period; and
References to the Adjustable Payments Table if any adjustments are not the result of a
change to the interest rate.
Example
If any of the adjustments to the periodic payment are not wholly due to interest rate
changes, the creditor includes a reference to the Adjustable Payments Table.
For example, if interest is payable only on the amount advanced for the time it is
outstanding, a reference is required because it is the amount advanced, not the
interest rate or not only the interest rate, that causes the periodic payment
adjustment.
The construction phase disclosure includes the additional bullet disclosures if the construction
phase periodic payment may increase after consummation and during the construction phase.
12 CFR § 1026.37(b)(6)(iii).
The permanent phase disclosure includes the additional bullet disclosures if the permanent
phase periodic payment may increase after consummation of the permanent phase. 12 CFR
§ 1026.37(b)(6)(iii). This would be irrespective of changes to the construction periodic payment.
Below is a discussion of the first, second, and third bullet points in this list.
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Adjustment Frequency and Timing
If the periodic payment may increase after consummation, Regulation Z, 12 CFR
§ 1026.37(b)(6)(iii) requires disclosure of the frequency of adjustments and timing of the first
payment adjustment.
For the separate construction phase disclosure, in determining the frequency of adjustments
and timing of the first periodic payment adjustment as required by the regulation, a creditor
may want to consider:
Whether the interest is accrued on the amount advanced or the entire commitment, as
this may impact whether draws will change the consumer’s periodic payment;
Whether there are any changes between interest-only, partially amortizing, or fully
amortizing periodic payments;
When the legal obligation allows the consumer to make the first and subsequent draws,
as this may impact when the consumer’s payment will adjust and the frequency of that
adjustment if a periodic payment adjustment may occur as a result of a draw; and
When the interest rate may first and subsequently adjust.
Construction Phase
The construction phase disclosure includes the frequency of adjustments and timing of the first
payment adjustment after consummation and during the construction phase. 12 CFR
§ 1026.37(b)(6)(iii).
For a separate construction phase disclosure, if the creditor is using Appendix D’s method of
estimation based on interest payable only on the amount advanced, then the creditor has
optionality as to whether it uses months or years for the disclosures under § 1026.37(b)(6)(iii).
Comment App. D-7.iv.B. If that method is not used, Comment 37(b)(6)-1 provides guidance on
the use of months or years.
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Permanent Phase
The separate permanent phase disclosure includes the frequency of adjustments and timing of
the first payment adjustment is based on the adjustments (if any) that occur after
consummation of the permanent phase. 12 CFR § 1026.37(b)(6)(iii). This would be irrespective
of changes to the construction periodic payment.
Example
For example, consider a construction-permanent loan where the permanent phase,
consummated simultaneously with the construction phase, has a fixed interest rate
that is unknown at consummation and remains unknown until conversion to the
permanent phase. If this rate adjustment at conversion may result in an increased
periodic payment from the amount disclosed at or before consummation, then the
bullet disclosing the frequency of adjustments and timing of the first payment
adjustment is required.
In such a case, assuming no other payment adjustments, the adjustment from the
payment disclosed at consummation to the payment upon conversion to the
permanent phase is the basis for the frequency and timing used for the disclosure.
EXAMPLE OF A COMPLIANT DISCLOSURE FOR ADJUSTMENT FREQUENCY AND TIMING
BULLET
For each example, assume:
Construction Phase: The construction phase is 10 months.
Consummation Timing: The construction phase loan and permanent phase loan are
consummated simultaneously.
Periodic Payments Frequency: Any periodic payments are on a monthly basis.
Rate Type: Fixed rate for both phases.
Interest-Only Period: Interest-only loan during the construction phase.
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Construction Loan Draws: The contract permits draws in each month (including
immediately after consummation).
LOAN SITUATION WHEN IT APPLIES
CONSTRUCTION
PHASE DISCLOSURE
(COMMENT App. D-7.iv.B;
COMMENT 37(b)(6)-1)
PERMANENT PHASE
DISCLOSURE
(COMMENT 37(b)(6)-1)
Estimated
construction
periodic payment
The interest is based
only on the amount
advanced and the
construction phase
periodic payments
are estimated using
Appendix D because
the actual schedule of
advances is not
known at or before
consummation.
“Adjusts every mo.
starting in mo. 1”
or
“Adjusts every mo.
starting in year 1”
Nothing for a separate
permanent phase
disclosure, so long as
the permanent phase
periodic payment
cannot increase from
the amount disclosed at
or before
consummation.
Unknown fixed
permanent phase
interest rate
The fixed interest rate
for the permanent
phase is unknown at
consummation, and
during the
construction phase
interest is accrued on
the entire
commitment and
periodic payments
are known, fixed, and
equal in amount.
Nothing for a construction
phase disclosure
because the known fixed
construction phase
periodic payment cannot
increase from the
payment disclosed at or
before consummation.
“Adjusts once starting in
mo. 1” for a permanent
phase disclosure if the
permanent phase
periodic payment may
increase from the
amount disclosed at
consummation.
Maximum Payment and Timing
If the periodic payment may increase after consummation of a construction or a construction-
permanent loan, Regulation Z, 12 CFR § 1026.37(b)(6)(iii) requires disclosure of the amount of
the maximum periodic payment and the date when the periodic payment may first equal the
maximum.
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Construction Phase
The construction phase disclosure includes the amount of the maximum periodic payment and
the date when the periodic payment may first equal the maximum after consummation and
during the construction phase. 12 CFR § 1026.37(b)(6)(iii).
The calculation of the maximum payment amount is based on the maximum possible principal
balance that could be outstanding during the construction phase. Comment App. D-7.iv.
In determining the maximum payment as required by the regulation, a creditor may want to
consider:
Whether interest is accrued on the amount advanced or the entire commitment amount,
as this may impact whether draws will impact when the consumer may reach the
maximum periodic payment;
Whether there are any changes between interest-only, partially amortizing, or fully
amortizing periodic payments;
When the legal obligation allows the consumer to make draws, as this may impact when
it is possible for the consumer to potentially reach the maximum periodic payment;
What, if any, limitations the legal obligation has on when the consumer may draw the
full commitment amount, as this may impact when it is possible for the consumer to
potentially reach the maximum periodic payment; and
What, if any, limitations the legal obligation has on when the interest rate in the
construction phase may reach the maximum rate, as this may impact when it is possible
for the consumer to potentially reach the maximum periodic payment even if the
consumer is able to draw the full amount in the first month.
For a separate construction phase disclosures, if the creditor is using Appendix D’s method of
estimation based on interest payable only on the amount advanced for the time it is outstanding,
then the creditor has optionality as to whether it uses months or years for the disclosures under
§ 1026.37(b)(6)(iii). Comment App. D-7.iv.B. If that method is not used, Comment 37(b)(6)-1
provides guidance on the use of months or years.
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Permanent Phase
The separate permanent phase disclosure includes the amount of the maximum periodic
payment and the date when the periodic payment may first equal the maximum after
consummation of the permanent phase. 12 CFR § 1026.37(b)(6)(iii). This would be irrespective
of changes to the construction periodic payment.
The amount and timing of the maximum periodic payment is based on the maximum payment
that may occur during the permanent phase, which may be impacted, for example, by an
unknown permanent phase interest rate at consummation. In this case, the periodic payment
may first equal the maximum as early as the first month if the interest rate set upon conversion
is the only change impacting the maximum payment.
EXAMPLE OF A COMPLIANT DISCLOSURE FOR THE MAXIMUM PAYMENT AND TIMING
BULLET
Construction Phase: The construction phase is 10 months.
Consummation Timing: The construction and permanent phase loans are
consummated simultaneously.
Interest Rate: The construction phase interest rate is fixed at 8% and the permanent
phase interest rate has a cap at 8% (or is fixed at 8% for the known periodic payments
example).
Interest-Only Period: The construction phase is an interest-only loan.
Construction Phase Draws: The consumer may draw monthly but may not draw the
entire commitment until month 9.
LOAN
SITUATION
WHEN IT APPLIES
CONSTRUCTION
PHASE DISCLOSURE
(COMMENT App. D-7.iv;
COMMENT 37(b)(6)(iii)-1;
COMMENT 37(b)(6)-1)
PERMANENT PHASE
DISCLOSURE
(COMMENT 37(b)(6)(iii)-1;
COMMENT 37(b)(6)-1)
Estimated
construction
periodic
payment
The interest is based only
on the amount advanced
and the construction phase
periodic payments are
estimated using Appendix
D because the actual
“Can go as high as
[maximum possible
interest-only periodic
payment based on entire
commitment amount and
the 8% construction
Nothing for a separate
permanent phase
disclosure, so long as
the permanent phase
periodic payment cannot
increase from the
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schedule of advances is
not known at or before
consummation.
phase interest rate] in mo.
9”
or
“Can go as high as
[maximum possible
interest-only periodic
payment based on entire
commitment amount and
the 8% construction
phase interest rate] in
year 1”
amount disclosed at or
before consummation.
Unknown
fixed
permanent
phase
interest rate
The fixed interest rate for
the permanent phase is
unknown at consummation
and may increase from the
rate disclosed at
consummation, resulting in
the possibility of the
periodic payment
increasing from the
amount disclosed at
consummation, and during
the construction phase
interest is accrued on the
entire commitment and
periodic payments are
known, fixed, and equal in
amount.
Nothing for a separate
construction phase
disclosure because the
known fixed construction
phase periodic payment
cannot increase from the
payment disclosed at or
before consummation.
“Can go as high as
[maximum possible
fully-amortizing periodic
principal and interest
payment based on 8%
maximum permanent
phase interest rate] in
mo. 1”
Interest-Only Period
If the periodic payment may increase after consummation and there is a period during which
only interest is required to be paid, Regulation Z, 12 CFR § 1026.37(b)(6)(iii) requires disclosure
of when the interest-only period will end in the Loan Terms Table.
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For a separate disclosure, the timing of the end of the interest-only period is the due date of the
last interest-only periodic payment the consumer will make before switching to principal and
interest payments.
Construction Phase
If the construction phase includes an interest-only period, the disclosure includes when the
interest-only period will end for any interest-only period after consummation and during the
construction phase. 12 CFR § 1026.37(b)(6)(iii).
Permanent Phase
If the permanent phase includes an interest-only period, the disclosure includes when the
interest-only period will end for any interest-only period after consummation of the permanent
phase. 12 CFR § 1026.37(b)(6)(iii). This would be irrespective of changes to the construction
interest-only period.
EXAMPLE OF A COMPLIANT DISCLOSURE FOR THE INTEREST-ONLY PERIOD BULLET
Construction Phase: The construction phase is 10 months.
Interest Rate Type: Fixed rate for both phases.
Periodic Payments Frequency: Any periodic payments are on a monthly basis.
Interest-Only Period: The 10-month construction phase and 12 months of the
permanent phase at the beginning.
LOAN
SITUATION
WHEN IT
APPLIES
CONSTRUCTION PHASE
DISCLOSURE
(COMMENT 37(b)(6)-1;
COMMENT 37(b)(6)(iii)-1)
PERMANENT PHASE
DISCLOSURE
(COMMENT 37(b)(6)-1;
COMMENT 37(b)(6)(iii)-1)
Interest-Only
Periods in
Both Phases
There is an
interest-only period
in the construction
phase and the
permanent phase
disclosures.
“Includes only interest and
no principal until mo. 10”
For a separate construction
disclosure, the conversion of
the construction phase loan
balance to the permanent
“Includes only interest and
no principal until year 2”
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phase loan balance in month
10 is treated as a balloon
payment and not as a periodic
interest-only payment.
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2. Projected Payments Table
The Projected Payments Table includes payment information about Principal & Interest,
Mortgage Insurance, Estimated Escrow, Estimated Total Monthly Payment, and Estimated
Taxes, Insurance & Assessments. 12 CFR § 1026.37(c).
The following focuses on particular topics for the Principal & Interest, Mortgage Insurance, and
Estimated Escrow payment disclosures based on the most common questions received by the
Bureau.
For more information on the Projected Payments Table disclosures, see section 2.2.3 of the
Guide to Forms.
First Column and Subsequent Columns
Under Regulation Z, 12 CFR § 1026.37(c), a creditor is required to disclose the principal and
interest periodic payment or range of payments in the Projected Payments Table. Additionally,
multiple columns—up to four—may be required if certain triggering events are met, such as
changes in the payment or balloon payments.
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Construction Phase
For either a fixed or adjustable rate construction financing disclosure, the first column of the
Projected Payments Table must include the payment or range of payments based on known
amounts or estimated payments based on the best information reasonably available or using the
options in Appendix D.
Example
For example, if using Appendix D part I.A.1 (with interest payable only on the
amount actually advanced for the time it is outstanding), the first column of the
Projected Payments Table discloses an interest-only payment (if the construction
phase rate will not change in the first year) or range of payments (if the
construction phase rate may change in the first year), calculated by assuming that
one-half of the commitment amount is outstanding at the contract interest rate (or
range of rates) for the entire construction period. Comment App. D-7.v.A.
Additional columns may be required if the triggering events in Regulation Z, 12 CFR
§ 1026.37(c)(1)(i) are met.
Example
For example, if the consumer pays only interest and no principal during the
construction phase resulting in a balloon payment, the Projected Payments Table
must include a separate column disclosing the balloon payment, or range of
balloon payments, as required by § 1026.37(c)(1)(i)(B).
Permanent Phase
The first column discloses the first periodic payment or range of payments for the permanent
phase.
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Additional column(s) may be required for any of the triggers listed in Regulation Z, 12 CFR
§ 1026.37(c)(1)(i).
Single vs. Range Payment
As stated above, under Regulation Z, 12 CFR § 1026.37(c), a creditor is required to disclose the
principal and interest periodic payment(s) in the Projected Payments Table. If one of the
triggering events identified in § 1026.37(c)(1)(iii) occurs, a creditor is required to disclose a
range of payments instead of a single payment.
Triggering events for a range of payments in the Projected Payments Table include:
There are more triggering events than can be shown in four columns and thus one
column must be used to show two or more periodic payment amounts.
The Principal & Interest payment or range of such payments may change more than once
in a single year or may change (at least once) in the same year as the initial periodic
payment.
The Principal & Interest payment may adjust based on an interest rate index and the
rates are not yet known (i.e., for an Adjustable Rate loan).
See 12 CFR § 1026.37(c)(1)(iii).
Construction Phase
In general, if using Appendix D to estimate payments, if there are no interest rate changes, in
most cases a single payment is disclosed (and, as discussed above, a separate column disclosing
the estimated balloon payment). 12 CFR § 1026.37(c)(1)(i).
For a separate construction phase disclosure, a trigger for a range of payments is periodic
payments that may adjust based on an adjustable rate, and as a result any column reflecting an
adjustment discloses a range of payments reflecting the lowest and highest periodic payment.
12 CFR § 1026.37(c)(1)(iii)(C).
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Example
For example, if the creditor chooses to use Appendix D to estimate the interest-
only periodic payment and the construction phase has an adjustable rate, the
creditor would apply the minimum and maximum contract interest rate to the
methodology in Appendix D to determine the lowest and highest periodic payment.
Additionally, the minimum and maximum contract interest rate would be used to
estimate the range of the balloon payments disclosed in a separate column as the
final payment.
Permanent Phase
For a separate permanent phase disclosure, a range of payments is also required if the periodic
payments may adjust based on an adjustable rate. Column(s) disclose a range of payments
reflecting the lowest and highest periodic payment. 12 CFR § 1026.37(c)(1)(iii)(C).
Additionally, a trigger specific to construction-permanent loans consummated simultaneously
occurs if the permanent phase has periodic payments where the payment information is
unknown at consummation because the interest rate is unknown and will be identified at
conversion from the construction phase. In these circumstances, the creditor estimates the
range of payments (even if the permanent phase interest rate will be fixed once known). 12 CFR
§ 1026.37(c)(1)(iii)(C).
However, if the permanent phase has a fixed periodic payment that is known at consummation
and will not change upon conversion from the construction phase, the Projected Payments Table
includes a column disclosing that single periodic payment, not a range of payments. 12 CFR
§ 1026.37(c)(1)(i).
Interest-Only Disclosure
In the Projected Payments Table, if the payment or range of payments includes any payments of
interest only, the creditor must disclose the phrase “only interest” under the amount of the
payment or range of payments. 12 CFR § 1026.37(c)(2)(i).
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Construction Phase
If the construction phase has interest-only payments, a column including any interest-only
payment includes the term “only interest” under the payment or range of payments. 12 CFR
§ 1026.37(c)(2)(i).
Permanent Phase
The creditor discloses “only interest” under the payment or range of payments in a column if it
includes any interest-only payment during the permanent phase. 12 CFR § 1026.37(c)(2)(i).
Mortgage Insurance and Escrow Payments
If the phase of the construction-permanent loan being disclosed includes mortgage insurance,
the creditor must disclose the maximum amount payable as mortgage insurance that
corresponds to the principal & interest payment shown in the same column. 12 CFR
§ 1026.37(c)(2)(ii).
If the phase of the construction-permanent loan being disclosed includes an escrow account, the
creditor must disclose the amount the consumer will pay into an escrow account to pay certain
charges under the terms of the legal obligation. 12 CFR § 1026.37(c)(2)(iii).
Construction Phase
Construction loans typically do not involve mortgage insurance and escrow payments in the
construction phase, but if they do, those payments are disclosed according to the requirements
in § 1026.37(c).
Permanent Phase
Mortgage insurance and escrow payments (if any) are disclosed as they are in any other non-
construction loan under the requirements in § 1026.37(c).
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3. Loan Costs Table
The Loan Costs Table includes cost information about services that the creditor or mortgage
broker require for consummation, such as underwriting, appraisal, and title services. 12 CFR
§ 1026.37(f); Comment 37(f)-1. In a transaction with construction financing, often there are fees
for inspection of the property and fees for handling the construction loan funds, such as “draw
fees” charged for loan disbursements (or draws). Those fees are considered loan costs.
Construction inspection and handling fees must be disclosed under the TRID Rule, and if using
separate disclosures, are generally disclosed on the construction phase disclosure. Comment
App. D-7.vii, Comment 17(c)(6)-5. The label and placement depends on when they are collected.
The following focuses on the Loan Costs Table disclosures based on the most common questions
received by the Bureau. In particular, the following discusses inspection and handling fees for
the staged disbursement of construction loan proceeds, including draw fees.
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For more information on the Loan Costs Table disclosures, see section 2.3.1 of the Guide to
Forms.
Where to disclose fees
Construction inspection and handling fees for the staged disbursement of construction loan
proceeds, including draw fees, are loan costs, and must be disclosed either in the Loan Costs
Table if collected at or before consummation or on an addendum if collected after
consummation. Comment 37(f)-3; Comment App. D-7.vii.
Example
For example, if an advance is taken at consummation to finance construction
inspection and handling fees, they are considered collected at consummation and
must be disclosed in the Loan Costs Table.
However, if the creditor permits the consumer to take advances after
consummation to cover construction loan inspection and handling fees, the fees
are collected after consummation and must be disclosed on an addendum.
How to total fees
Disclosure of construction inspection and handling fees must be disclosed as a single total of
inspection and handling fees, whether in the Loan Costs Table or on an addendum. Comment
37(f)-3. However, Regulation Z does not prohibit breaking the total down into subtotals as
provided by other provisions, such as to disclose different service providers or to distinguish
services for which the consumer may shop.
Example
For example, if the consumer can shop for some, but not all, inspection and
handling fees, the creditor may disclose a total for the portion of services for which
the consumer can shop in that designated section of the Loan Costs Table and a
separate total in the section showing fees for which the consumer cannot shop.
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Further, if the fees are paid to different service providers, creditors may disclose
separate inspection and handling fee totals for each service provider.
But note, if disclosed on an addendum, Regulation Z requires a single total of the inspection and
handling fees. Comment 37(f)(6)-3. Further breakdowns may be provided on the addendum in
a clear and conspicuous manner, so long as the total is disclosed.
How to label fees
If disclosed on the Loan Costs Table, the label for the inspection and handling fees must be clear
and conspicuous, whether disclosed as a single total or as separate totals to disclose different
service providers or to distinguish services for which the consumer may shop. 12 CFR
§§
1026.37(f)(5), 37(o)(1), and 38(t)(1).
Example
For example, when disclosing as a single total, one option for labeling the total is
“Inspection and Handling Fees.” See 12 CFR § 1026.37(f)(5); Comment 37(f)(5)-1.
I
f disclosed on an addendum, the label “Inspection and Handling Fees Collected After Closing”
is required for the total fee on the addendum. Comment 37(f)(6)-3. Any further breakdowns, if
used, must be labeled in a clear and conspicuous way. 12 CFR §§ 1026.37(o)(1) and 38(t)(1).
How to estimate unknown or changed fees
When disclosing on either the Loan Costs Table or the addendum, if any part of these fees is
unknown at the time of disclosure, creditors must estimate based on the best information
reasonably available to them at the time they provide the disclosure.
Similarly, if the disclosures are made based on the best information reasonably available at the
time of disclosure, a creditor does not violate the disclosure requirements in Regulation Z if the
items disclosed change because of subsequent events after consummation (for example, if more,
unanticipated inspections need to be added after consummation). 12 CFR § 1026.17(e).
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4. Adjustable Payments (AP)
Table
The Adjustable Payments (AP) Table includes information about Interest Only Payments,
Optional Payments, Step Payments, Seasonal Payments, and other details regarding periodic
Principal and Interest Payments. 12 CFR § 1026.37(i). The AP Table is required when the
periodic principal and interest payments may change after consummation but not based on an
adjustment to the interest rate, or if the loan is a seasonal payment product as defined in
Regulation Z, 12 CFR § 1026.37(a)(10)(ii)(E). 12 CFR § 1026.37(i).
For separate construction phase disclosures, one common scenario that may trigger the
requirement to disclose the AP Table is when the periodic principal and interest payment may
change because the amounts or timing of advances are unknown at consummation and the
construction loan interest is payable only on the amount advanced for the time it is outstanding.
In such cases, there may be a change to the periodic payment after consummation not based on
an adjustment to the interest rate, because the periodic payment may change due to changes in
the amount of the principal balance to which the interest rate is applied. The AP Table is
triggered in this scenario even when Appendix D is used to estimate the periodic payment.
The following focuses on the AP Table disclosures based on the most common questions
received by the Bureau. In particular, the following discusses disclosures for Interest Only
Payments and other details regarding periodic Principal and Interest Payments.
For more information on the AP Table disclosures, see section 2.3.5 of the Guide to Forms.
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Interest-Only Payments
Creditors must disclose whether the loan has interest-only payments and, if “YES,” the period
during which interest-only periodic payments are scheduled. 12 CFR § 1026.37(i)(1).
For a separate construction disclosure, if the construction phase is interest-only, the creditor
must disclose “YES” as well as the period during which interest-only payments are scheduled.
12 CFR § 1026.37(i)(1). Such period should be disclosed by describing the number of payments
counting from the first periodic payment due after consummation. Comment 37(i)-2.
First Change/Amount
Under Principal and Interest Payments, the creditor must disclose the number of the first
payment that may change, counting from the first periodic payment due after consummation,
and the amount or range of the periodic principal and interest payment for such payment.
12 CFR § 1026.37(i)(5)(i).
For separate construction phase disclosures, when the amounts or timing of advances are
unknown at consummation, the disclosure is the number of the earliest possible payment (e.g.,
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the 1
st
payment) that may change and, also, generally the amount or range corresponding to the
first periodic payment that may change. 12 CFR § 1026.37(i)(5); Comment 37(i)(5)-2.
However, if the creditor estimates the periodic payment using the assumption in Appendix D
that applies if interest is payable only on the amount advanced for the time it is outstanding,
then the creditor may omit and leave blank the amount or range corresponding to the first
periodic payment that may change (but the creditor still must disclose the timing of such
payment). Comment App. D-7.iv.B.
Example
For example, the disclosure may be “1st payment” because the legal obligation
allows draws, in an unknown amount, prior to the first payment. If the creditor
estimates the periodic payment using the assumption in Appendix D that applies if
interest is payable only on the amount advanced for the time it is outstanding, then
the creditor may leave blank the amount or range corresponding to the first
change.
Subsequent Change
Under Principal and Interest Payments, the creditor must disclose the frequency of subsequent
changes to the periodic principal and interest payment. 12 CFR § 1026.37(i)(5)(ii). Comment
37(i)(5)-3 provides that if the frequency of adjustments to the periodic payment may change
under the terms of the legal obligation, the disclosure should state the shortest period between
adjustments that may occur.
Example
For example, in the construction phase, if the periodic principal and interest
payments may change more than once during the construction phase (because,
for example, of changes in the amount advanced), the creditor must disclose the
shortest period between adjustments that may occur as the frequency of
subsequent changes on a separate construction disclosure. 12 CFR
§ 1026.37(i)(5); Comment 37(i)(5)-3.
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TRID RULE: SEPARATE CONSTRUCTION LOAN DISCLOSURES GUIDE
Maximum Payment
Under Principal and Interest Payments, the creditor must disclose the maximum periodic
principal and interest payment timing and amount. 12 CFR § 1026.37(i); Comment App. D-7.iv.
In a separate construction disclosure, if the construction phase periodic payments are interest-
only, Comment 37(i)(5)-5 provides the creditor must disclose the maximum possible periodic
interest-only payment (even though this section is labeled “Principal and Interest Payments”).
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TRID RULE: SEPARATE CONSTRUCTION LOAN DISCLOSURES GUIDE
Additional resources
For more information, you can visit www.consumerfinance.gov/policy-
compliance/guidance/tila-respa-disclosure-rule/ to reference:
The full TRID Rule
The section-by-section analysis or preamble, which explains why the Bureau issued the
rule, the legal authority and reasoning behind the rule, responses to comments, and
analysis of the benefits, costs, and impacts of the rule
Official Interpretations of the rule
The TILA-RESPA Small Entity Compliance Guide
The TILA-RESPA Guide to Forms
Other implementation support materials (including proposed rule amendments, if
applicable)
More resources related to mortgage rule implementation are available at
www.consumerfinance.gov/policy-compliance/guidance/
.
If you have a specific regulatory interpretation question about the TRID Rule after reviewing
these materials, as well as the regulation and official commentary, you can submit it to us at
reginquiries.consumerfinance.gov/
. Please understand that the responses we provide are not
official interpretations of the Bureau and are not a substitute for formal legal counsel or other
compliance advice.
For email updates about when additional compliance resources become available, sign up for
email updates about mortgage rule implementation at
www.consumerfinance.gov/policy-
compliance/guidance/.
Email comments about the Guide to CFPB_RegulatoryImplementation@consumerfinance.gov.
Your feedback is crucial to making this Guide as helpful as possible. The Bureau welcomes your
suggestions for improvements and your thoughts on its usefulness and readability.