Do construction-permanent loans qualify for the 12-month exception from flood escrow if the construction phase is for 12 months or less?
No. While construction-permanent loans typically have an interest-only construction phase of around one year, the total loan term is generally 20 to 30 years. The exception from the new escrow rules requires that the total loan term be 12 months or less. Since both the construction and permanent phases have to be considered in the loan term, a construction-permanent loan would not qualify for the exception, even if the construction phase is for 12 months or less.
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