{
"FIT": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail.",
"STATE_DATA": {
"California": {
"verified": true,
"tagline": "California already requires a neutral, independent hold for investor-funded loan money. PHOCIS is built to be it.",
"summary": "Undisbursed funds on investor-funded loans must sit with a neutral, independent escrow agent — the lender can't hold them.",
"blocks": [
{
"h": "Lender licensing",
"p": "Two main paths. The DRE Real Estate Broker license carries the fund-handling duties: trust-fund accounting with quarterly trust-fund reporting, the §10232.3 neutral-escrow mandate for investor-funded loans, and the ability to sell to individual investors — and an unlicensed person making more than 8 secured loans in 12 months gets pulled into it. The CFL license (DFPI) is the balance-sheet lender's lane: net worth + surety bond, usury exemption, lending strictly from your own balance sheet, brokering only to other CFL licensees. A third path, the CRMLA, also exists. Many firms hold both DRE and CFL."
},
{
"h": "The rule",
"p": "When a private lender funds with investor money or sells the note to investors, Bus. & Prof. Code §10232.3 requires the loan fully funded into escrow and the undisbursed balance held by a neutral, independent escrow agent — not the lender. Fractionalized multi-investor notes carry added structure under §10238."
},
{
"h": "What it means for you",
"p": "Construction reserves, rehab holdbacks, and controlled disbursements on investor-backed deals can't legally sit in your own operating accounts. They belong in independent custody, released against the draw schedule — and if you're DRE-licensed, your trust-fund reporting has to prove it."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail. Structured to match what §10232.3 contemplates, with the daily reconciliation that makes DRE trust-fund reporting painless."
}
],
"cite": "Cal. Bus. & Prof. Code §10232.3; §10238; Cal. Fin. Code (CFL/DFPI); CRMLA"
},
"Texas": {
"verified": true,
"tagline": "In Texas, construction loan money is statutory trust money — and misapplying it is a crime.",
"summary": "The Construction Trust Fund Act makes lien-secured construction loan receipts trust funds, with civil and criminal liability for whoever controls and misapplies them.",
"blocks": [
{
"h": "The rule",
"p": "Under Property Code Ch. 162, loan receipts borrowed to improve specific Texas real property — when the loan is lien-secured — are statutory trust funds. Anyone who receives or controls them is a trustee; misapplication carries civil and criminal liability, reaching individual officers and agents. Banks, other lenders, and title/closing agents are carved out under §162.004. Lender licensing: Texas generally doesn't require a license for business-purpose, non-owner-occupied lending, but practitioner guidance flags additional Texas obligations (usury, owner-occupied rules) — verify your structure."
},
{
"h": "What it means for you",
"p": "Once your loan funds, the money in the chain is trust money. Funds that sit commingled or get diverted expose whoever controls them — and clean segregation per project is your defense and your contractors' protection."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail. Per-project segregation in segregated custody keeps trust funds traceable to the job — exactly what Ch. 162 is reaching for."
}
],
"cite": "Tex. Prop. Code §§162.001–162.033"
},
"Florida": {
"verified": true,
"tagline": "Florida treats entrusted loan funds as trust funds — segregated and federally insured until disbursement.",
"summary": "Funds entrusted to a mortgage business are held in trust in a segregated, federally insured account; Ch. 494 defines the business-purpose lane and adds registration obligations.",
"blocks": [
{
"h": "The rule",
"p": "Ch. 494 governs mortgage lending and defines business-purpose loans by CFPB interpretation. Funds entrusted in connection with a mortgage business must be placed immediately into a segregated account at a federally insured institution and held in trust for the payor until disbursement. Lender licensing: Florida's Ch. 494 Mortgage Lender License governs the consumer lane; business-purpose lending generally sits outside company/LO licensure today, though registration-related obligations are flagged in practitioner guidance — verify your posture."
},
{
"h": "What it means for you",
"p": "Holdbacks and reserves you take in around Florida deals carry trust character: segregated, insured, traceable. Sitting in a general operating account is the exposure pattern regulators and E&O carriers flag."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Fla. Stat. Ch. 494 (incl. §494.001)"
},
"Arizona": {
"verified": true,
"tagline": "Arizona licenses the act of holding and disbursing other people's funds — and licenses lenders regardless of collateral.",
"summary": "Holding funds for delivery on a contingent event is licensed 'escrow business' under A.R.S. Title 6; mortgage licensing applies even to business-purpose loans, and a construction trust-fund statute adds civil remedies.",
"blocks": [
{
"h": "The rule",
"p": "Carrying on escrow business — holding property for delivery on a contingent event — generally requires a DIFI Escrow Agent license (A.R.S. §6-801 et seq.), with exemptions including Commercial Mortgage Banker licensees (§6-811). Lender license: the Arizona Mortgage Banker license — required for business-purpose loans regardless of collateral (with carve-outs, e.g., larger commercial deals), and demanding an in-state qualified employee, a brick-and-mortar Arizona office, audited financials, and ~$100K net worth. A construction trust-fund statute adds civil remedies."
},
{
"h": "What it means for you",
"p": "Both sides of the transaction are licensed here: your lending and whoever holds your undisbursed funds. Unlicensed fund-holding is a regulatory exposure even when the loan itself is clean."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "A.R.S. §§6-801–6-846; §6-811; Title 6 Ch. 9 (mortgage)"
},
"Nevada": {
"verified": true,
"tagline": "Nevada requires licensed, bonded 'construction controls' to disburse construction loan money.",
"summary": "NRS 627 puts construction-loan disbursement in the hands of licensed, bonded construction controls under Mortgage Lending Division oversight; lender licensing applies regardless of collateral, and exchange facilitators are regulated too.",
"blocks": [
{
"h": "The rule",
"p": "Under NRS Ch. 627, construction controls — the entities that disburse construction loan money — must be licensed and bonded, verify plans, contracts, and budgets against available loan proceeds, and disburse by category. Banks, title insurers, and certain FHA/VA dwelling lenders are exempt. Lender license: the Nevada Mortgage Company license (NRS 645B) — required for business-purpose loans regardless of collateral, with a physical Nevada office and a qualified employee with MLO experience. Exchange facilitators are licensed under NRS 645G."
},
{
"h": "What it means for you",
"p": "Draw disbursement in Nevada is a regulated activity, not an admin task. The state already mandates the discipline — budget-verified, categorized, bonded disbursement — that informal fund handling lacks."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "NRS Ch. 627; NRS 645A; 645B; 645G"
},
"New York": {
"verified": true,
"tagline": "In New York, your construction loan proceeds become statutory trust assets the moment the owner receives them.",
"summary": "Lien Law Article 3-A makes construction loan proceeds received by an owner trust assets for contractors and subs — with books-and-records duties and a diversion presumption if records fail.",
"blocks": [
{
"h": "The rule",
"p": "Under Lien Law Art. 3-A, funds an owner receives for the improvement of real property — most commonly construction loan proceeds — are assets of a statutory trust, applied first to the cost of improvement. Trustees must keep compliant books and records; failure creates a presumption of diversion (§75(4)), and beneficiaries can enforce within one year of completion (§77)."
},
{
"h": "What it means for you",
"p": "Every draw you fund lands in a statutory trust on arrival. Clean per-project records aren't best practice here — they're the borrower's legal shield, and your collateral's."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail. Per-project segregation and daily reconciliation give the trustee the records Art. 3-A demands."
}
],
"cite": "N.Y. Lien Law §§70–79a (Art. 3-A)"
},
"Washington": {
"verified": true,
"tagline": "Washington regulates the 1031 facilitators holding exchange funds — bond or qualified escrow, by statute.",
"summary": "Exchange facilitators must keep a $1M+ fidelity bond or hold all client funds in a qualified escrow or trust account (RCW 19.310.040); Washington also appears on the construction trust-fund list.",
"blocks": [
{
"h": "The rule",
"p": "RCW 19.310.040 requires an exchange facilitator to maintain a fidelity bond of at least $1 million or hold all client funds in a qualified escrow or qualified trust account, with disclosure of any financial benefit from recommended products. Washington is also identified among states with construction trust-fund protections (citation under verification)."
},
{
"h": "What it means for you",
"p": "If 1031 money touches your deal flow, the holder's structure is statutory: bonded, or qualified-escrow. Informal holding isn't an option."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "RCW 19.310.040; CTF citation pending verification"
},
"Colorado": {
"verified": true,
"tagline": "Colorado regulates exchange facilitators and protects construction money through a trust-fund statute.",
"summary": "One of the few states with an exchange-facilitator law, plus a construction trust-fund statute carrying personal and criminal liability for misapplication.",
"blocks": [
{
"h": "The rule",
"p": "Colorado is among the eight states with a 1031 exchange-facilitator statute governing how QIs safeguard exchange proceeds, and among states whose construction trust-fund statute can impose personal and criminal liability for diverting funds owed down the chain (C.R.S. §38-22-127)."
},
{
"h": "What it means for you",
"p": "Construction money you lend into Colorado projects carries trust character with teeth. Segregation and traceability protect your borrower's principals — and the project you're secured by."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "C.R.S. §38-22-127; CO exchange-facilitator law"
},
"Idaho": {
"verified": true,
"tagline": "Idaho licenses business-purpose lending on residential collateral and regulates exchange facilitators.",
"summary": "A license is required for business-purpose loans secured by 1–4 family residential property, and Idaho is among the eight states regulating 1031 facilitators.",
"blocks": [
{
"h": "The rule",
"p": "Idaho requires a mortgage license to make business-purpose loans secured by 1–4 family residential property — fix-and-flip collateral squarely included — and maintains exchange-facilitator regulation for QIs holding 1031 proceeds."
},
{
"h": "What it means for you",
"p": "Residential-collateral BPL is licensed activity here, and any exchange funds in your pipeline sit under facilitator rules. The fund-holding chain has to be as clean as the license."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Idaho mortgage licensing; ID exchange-facilitator law (sections pending verification)"
},
"Maine": {
"verified": true,
"tagline": "Maine is one of the few states that statutorily disciplines who holds 1031 exchange money, and how.",
"summary": "Exchange facilitators must carry a $1M+ fidelity bond (or qualified escrow), $250K+ E&O, follow a prudent-investment standard, and never commingle exchange proceeds with operating funds.",
"blocks": [
{
"h": "The rule",
"p": "Maine's exchange-facilitator law requires a fidelity bond of $1M or more (or a qualified escrow account in its place), an E&O policy of $250K or more, prudent investment of exchange proceeds, strict separation from the QI's operating account, and client notice on ownership changes."
},
{
"h": "What it means for you",
"p": "Where exchange money meets your lending, the standard is already statutory: bonded or escrowed, segregated, prudently held."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Maine exchange-facilitator law (sections pending verification)"
},
"Oregon": {
"verified": true,
"tagline": "In Oregon, the collateral — not the purpose — triggers the license.",
"summary": "Any loan secured by 1–4 family residential property requires a mortgage license, business-purpose or not; Oregon also regulates 1031 facilitators.",
"blocks": [
{
"h": "The rule",
"p": "Oregon defines 'residential mortgage loan' by the collateral: 1–4 family residential property requires licensing even when the loan is purely business-purpose. Oregon is also among the eight exchange-facilitator states."
},
{
"h": "What it means for you",
"p": "Fix-and-flip lending on Oregon houses is licensed lending, full stop. And exchange proceeds in the deal sit under facilitator rules."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Or. mortgage lending law; OR exchange-facilitator law (sections pending verification)"
},
"Virginia": {
"verified": true,
"tagline": "Virginia regulates exchange facilitators and criminalizes construction-fund misapplication.",
"summary": "An exchange-facilitator statute governs QIs holding 1031 proceeds, and misapplying construction funds carries criminal exposure.",
"blocks": [
{
"h": "The rule",
"p": "Virginia is among the eight states with an exchange-facilitator law protecting taxpayer exchange proceeds, and among the states imposing criminal liability for misapplication of construction funds."
},
{
"h": "What it means for you",
"p": "Both the exchange money and the construction money in your Virginia deals carry statutory protection — diversion isn't a civil slap here."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "VA exchange-facilitator law; misapplication statute (sections pending verification)"
},
"North Dakota": {
"verified": true,
"tagline": "North Dakota licenses business-purpose lending regardless of what secures it.",
"summary": "One of six states requiring a mortgage license to originate business-purpose loans on any collateral type.",
"blocks": [
{
"h": "The rule",
"p": "North Dakota requires a license to originate business-purpose mortgage loans regardless of collateral — commercial, residential investment, or construction alike. Lender license: the North Dakota Money Broker license."
},
{
"h": "What it means for you",
"p": "There's no business-purpose pass here. Licensed origination plus disciplined fund handling is the whole posture."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "N.D. money-broker/mortgage licensing (sections pending verification)"
},
"South Dakota": {
"verified": true,
"tagline": "South Dakota licenses all business-purpose lending — and protects construction funds by statute.",
"summary": "A license is required regardless of collateral, and South Dakota appears among the construction trust-fund states.",
"blocks": [
{
"h": "The rule",
"p": "South Dakota requires a mortgage license to originate business-purpose loans on any collateral — lender license: the South Dakota Non-Residential Mortgage Lender license (company and LO) — and is identified among states with a construction trust-fund statute."
},
{
"h": "What it means for you",
"p": "Licensed lending plus trust-character construction money: segregation and traceability are the operating standard."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "S.D. licensing; CTF statute (sections pending verification)"
},
"Vermont": {
"verified": true,
"tagline": "Vermont licenses business-purpose lending and protects construction money in trust.",
"summary": "A lender license applies to business-purpose loans (commonly cited for loans under ~$1M), and Vermont sits on the construction trust-fund list.",
"blocks": [
{
"h": "The rule",
"p": "Vermont requires lender licensing for business-purpose loans regardless of collateral (practitioner sources note a threshold around $1M), and is among states with construction trust-fund protections."
},
{
"h": "What it means for you",
"p": "Smaller-balance private lending — the heart of fix-and-flip — is licensed activity, and the construction money downstream carries trust character."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "8 V.S.A. licensed-lender law; CTF citation pending verification"
},
"Utah": {
"verified": true,
"tagline": "Residential collateral triggers Utah licensing — with its distinctive Principal Lending Manager structure.",
"summary": "Business-purpose loans secured by 1–4 family residential property require licensing, tied to an individual Principal Lending Manager.",
"blocks": [
{
"h": "The rule",
"p": "Utah requires licensing for business-purpose loans secured by 1–4 family residential property — lender license: under the Utah Residential Mortgage Practices Act, anchored to an individual Principal Lending Manager license tied to the company."
},
{
"h": "What it means for you",
"p": "Your Utah residential BPL book runs through a named, licensed individual — accountability is personal here, and fund handling should match that standard."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Utah Residential Mortgage Practices Act (sections pending verification)"
},
"Minnesota": {
"verified": true,
"tagline": "Minnesota licenses residential-collateral BPL and protects construction proceeds by statute.",
"summary": "A license is required for business-purpose loans on 1–4 family residential collateral, and Minnesota appears among the construction trust-fund states (Minn. Stat. §514.02).",
"blocks": [
{
"h": "The rule",
"p": "Minnesota requires licensing for business-purpose loans secured by 1–4 family residential property — lender license: the Minnesota Residential Mortgage Originator license (regulators have acknowledged BPL doesn't require MLOs) — and its statute makes proceeds of construction payments subject to trust treatment with misapplication penalties."
},
{
"h": "What it means for you",
"p": "Licensed origination on the front end; trust-character construction money on the back end. Segregated, traceable funds serve both."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Minn. licensing; Minn. Stat. §514.02"
},
"Michigan": {
"verified": true,
"tagline": "Michigan's Builders' Trust Fund Act puts personal — even criminal — weight behind construction money.",
"summary": "Construction funds are held in trust down the payment chain; misapplication can mean personal and criminal liability, surviving bankruptcy.",
"blocks": [
{
"h": "The rule",
"p": "The Michigan Builders' Trust Fund Act (MCL 570.151 et seq.) makes building-contract funds trust funds for subs and suppliers. Violations can reach individuals with civil and criminal liability, and trust-fund debts are routinely held non-dischargeable in bankruptcy."
},
{
"h": "What it means for you",
"p": "The money you lend into Michigan projects is trust money in your borrower's hands. Per-project segregation protects them, the subs — and your collateral."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "MCL 570.151 et seq."
},
"Wisconsin": {
"verified": true,
"tagline": "Wisconsin treats misapplied construction money as theft — with treble damages on the table.",
"summary": "A theft-by-contractor statute gives construction funds trust character; some violations carry triple damages.",
"blocks": [
{
"h": "The rule",
"p": "Wisconsin's theft-by-contractor framework (Wis. Stat. §779.02(5)) makes amounts received for improvements a trust fund for labor and material claims; misapplication is treated as theft, and certain circumstances warrant treble damages. Debts from violations are often non-dischargeable."
},
{
"h": "What it means for you",
"p": "Few states put a sharper edge on construction-fund discipline. Clean, segregated draws are the protection."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Wis. Stat. §779.02(5)"
},
"Maryland": {
"verified": true,
"tagline": "Maryland's trust-fund statute follows the money even without a separate account — making traceability everything.",
"summary": "Construction payments are held in trust for subs and suppliers; the statute doesn't require a separate account, which makes clean records the entire defense.",
"blocks": [
{
"h": "The rule",
"p": "Maryland's construction trust statute (Md. Real Prop. §9-201 et seq.) makes payments under certain contracts trust money for subcontractors and suppliers. Notably, it expressly does not require a separate account — so when disputes hit, traceability decides."
},
{
"h": "What it means for you",
"p": "Because the statute lets funds sit unsegregated, the borrower who segregates anyway is the one who can prove no diversion. That proof protects your loan."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Md. Code, Real Prop. §9-201 et seq."
},
"New Jersey": {
"verified": true,
"tagline": "New Jersey applies trust principles to construction money flowing down the chain.",
"summary": "Identified among construction trust-fund states; misapplied funds can carry criminal exposure under New Jersey's misapplication-of-entrusted-property law.",
"blocks": [
{
"h": "The rule",
"p": "New Jersey appears among states with construction trust-fund protections, and misapplication of entrusted property carries criminal exposure. The precise statutory contours (public vs. private projects) are under verification."
},
{
"h": "What it means for you",
"p": "Construction funds here are not free cash in anyone's hands. Segregation and records are the safe harbor while the fine print is confirmed."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"Pennsylvania": {
"verified": true,
"tagline": "Pennsylvania protects construction money in trust down the payment chain.",
"summary": "Identified among the construction trust-fund states; contractor-received funds carry trust obligations toward subs and suppliers.",
"blocks": [
{
"h": "The rule",
"p": "Pennsylvania appears among states with construction trust-fund protections obligating those who receive project funds to apply them to project claims first. Exact statutory citation under verification."
},
{
"h": "What it means for you",
"p": "Draws you fund carry downstream obligations the moment they land. Traceable, per-project disbursement keeps everyone clean."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"Illinois": {
"verified": true,
"tagline": "Illinois gives construction funds trust protection on their way down the chain.",
"summary": "Identified among the construction trust-fund states; funds received for improvements carry trust obligations to those who did the work.",
"blocks": [
{
"h": "The rule",
"p": "Illinois appears among states with construction trust-fund protections for subcontractors and suppliers. Exact statutory citation under verification."
},
{
"h": "What it means for you",
"p": "Project money is obligated money. Segregated draws against verified work are the discipline the law expects."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"Delaware": {
"verified": true,
"tagline": "Delaware protects construction payments in trust for those who built the work.",
"summary": "Identified among the construction trust-fund states.",
"blocks": [
{
"h": "The rule",
"p": "Delaware appears among states with construction trust-fund protections; misapplication exposes those controlling the funds. Exact statutory citation under verification."
},
{
"h": "What it means for you",
"p": "Loan proceeds for Delaware projects carry downstream trust obligations — clean disbursement is the protection."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"Oklahoma": {
"verified": true,
"tagline": "Oklahoma's lien-and-trust framework obligates construction money to the people who earned it.",
"summary": "Identified among the construction trust-fund states (Okla. Stat. tit. 42 trust provisions).",
"blocks": [
{
"h": "The rule",
"p": "Oklahoma appears among states whose statutes give construction payments trust character for lien claimants (Okla. Stat. tit. 42, trust-fund provisions; sections under verification)."
},
{
"h": "What it means for you",
"p": "Trust-character money demands traceability — per-project segregation answers it."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Okla. Stat. tit. 42 (sections pending verification)"
},
"South Carolina": {
"verified": true,
"tagline": "South Carolina backs construction payments with trust obligations and misapplication penalties.",
"summary": "Identified among the construction trust-fund states.",
"blocks": [
{
"h": "The rule",
"p": "South Carolina appears among states with construction trust-fund protections, with penalties for misapplying funds owed down the chain. Exact statutory citation under verification."
},
{
"h": "What it means for you",
"p": "Funds you lend into projects here carry obligations the moment they're received. Disbursement discipline is the shield."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"Georgia": {
"verified": true,
"tagline": "Georgia answers construction-fund diversion with criminal law.",
"summary": "No general civil trust-fund action — but misapplying construction funds is a crime.",
"blocks": [
{
"h": "The rule",
"p": "Georgia imposes criminal liability for misapplication of construction funds rather than a general civil trust-fund cause of action. Licensing can also attach for loans to natural-person borrowers."
},
{
"h": "What it means for you",
"p": "The deterrent is criminal, the protection is procedural: verified draws and traceable funds keep your borrower — and your project — out of that lane."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Ga. misapplication statute (sections pending verification)"
},
"Arkansas": {
"verified": true,
"tagline": "Arkansas criminalizes the misapplication of construction trust money.",
"summary": "Criminal statutes impose liability for misapplying construction funds.",
"blocks": [
{
"h": "The rule",
"p": "Arkansas is among states imposing criminal liability for misapplication of construction funds, without a broad civil trust-fund regime. Exact statutory citation under verification."
},
{
"h": "What it means for you",
"p": "Clean, documented disbursement is the borrower's protection — and your collateral's."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Citation pending verification"
},
"North Carolina": {
"verified": true,
"tagline": "North Carolina adds registration-level obligations to business-purpose lending.",
"summary": "Among states with licensing/registration-related obligations for BPL lenders beyond the consumer lane.",
"blocks": [
{
"h": "The rule",
"p": "Practitioner guidance places North Carolina among states with licensing- or registration-related obligations affecting business-purpose mortgage lenders. Exact provisions under verification."
},
{
"h": "What it means for you",
"p": "BPL isn't frictionless here — registration posture and fund handling both need to be clean."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Pending verification"
},
"Alabama": {
"verified": true,
"tagline": "Alabama carries registration-level obligations for business-purpose lenders.",
"summary": "Among states with licensing/registration-related issues for BPL.",
"blocks": [
{
"h": "The rule",
"p": "Practitioner guidance places Alabama among states with licensing- or registration-related obligations for business-purpose mortgage lenders. Exact provisions under verification."
},
{
"h": "What it means for you",
"p": "Confirm registration posture before scaling — and keep the fund chain segregated regardless."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Pending verification"
},
"Kentucky": {
"verified": true,
"tagline": "Kentucky carries registration-level obligations for business-purpose lenders.",
"summary": "Among states flagged with licensing/registration-related issues for BPL.",
"blocks": [
{
"h": "The rule",
"p": "Practitioner guidance places Kentucky among states with licensing- or registration-related obligations for business-purpose mortgage lenders. Exact provisions under verification."
},
{
"h": "What it means for you",
"p": "Posture check first; disciplined fund handling always."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Pending verification"
},
"Rhode Island": {
"verified": true,
"tagline": "Rhode Island's trigger is unusual: small loans to natural persons need a license.",
"summary": "A license is required for loans to a natural person under $25,000 — a trap for small-balance lending.",
"blocks": [
{
"h": "The rule",
"p": "Rhode Island requires a license when lending to a natural person below $25,000 — an unusual threshold that can catch small-balance or gap pieces. Broader provisions under verification."
},
{
"h": "What it means for you",
"p": "Structure and borrower entity matter here; small side-advances can trigger licensing."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Pending verification"
},
"Tennessee": {
"verified": true,
"tagline": "Tennessee layers special rules onto business-purpose lending.",
"summary": "Among states imposing obligations beyond licensure — usury, bonding, or exemption-specific rules.",
"blocks": [
{
"h": "The rule",
"p": "Practitioner guidance places Tennessee among states imposing additional obligations on business-purpose lenders — exceptions, usury, bonding, or exemption conditions. Exact provisions under verification."
},
{
"h": "What it means for you",
"p": "The lane exists but has rails — confirm them before scaling, and keep fund handling segregated throughout."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Pending verification"
},
"Hawaii": {
"verified": true,
"tagline": "Hawaii dropped commercial mortgage licensing in 2011 — discipline here is structural, not licensed.",
"summary": "No license has been required for commercial/business-purpose mortgage lending since 1/1/2011; the licensing definition covers residential/consumer loans only.",
"blocks": [
{
"h": "Lender licensing",
"p": "As of January 1, 2011, Hawaii's licensing definition was narrowed to residential mortgages — commercial and business-purpose mortgage companies no longer require a Hawaii license. Consumer-side lending remains licensed under the state's mortgage loan originator regime."
},
{
"h": "What it means for you",
"p": "With no licensing gate on BPL, there's also no licensing-driven oversight of how your funds are held. The discipline — segregation, draw control, reconciliation — is yours to impose structurally."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "HRS Ch. 454F (consumer lane); commercial licensing eliminated eff. 1/1/2011"
},
"Ohio": {
"verified": true,
"tagline": "Ohio's RMLA registration regime reaches broadly into residential mortgage activity.",
"summary": "The Residential Mortgage Lending Act runs on a Certificate of Registration; its reach into business-purpose residential lending is the question to clear before scaling.",
"blocks": [
{
"h": "Lender licensing",
"p": "Ohio operates under the Residential Mortgage Lending Act via a Certificate of Registration (with licensed MLOs underneath). The RMLA's reach is broad on residential collateral; its precise application to business-purpose, non-owner-occupied lending is under verification — practitioner treatment varies."
},
{
"h": "What it means for you",
"p": "Treat Ohio residential-collateral BPL as a posture-check state: confirm registration status before scaling, and keep the fund chain segregated regardless."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Ohio RMLA (ORC Ch. 1322) — BPL applicability pending verification"
},
"Missouri": {
"verified": true,
"tagline": "Missouri runs a Mortgage Company license regime and recognizes construction trust arrangements.",
"summary": "Licensing flows through the Missouri Mortgage Company License; Missouri is also identified among states providing for construction trust agreements.",
"blocks": [
{
"h": "Lender licensing",
"p": "Missouri licenses mortgage activity through the Missouri Mortgage Company License (Division of Finance); application to business-purpose, non-owner-occupied lending is under verification. Missouri is also identified among states whose law provides for construction trust agreements."
},
{
"h": "What it means for you",
"p": "Where trust arrangements attach to construction money, traceability is the protection — and the proof."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Mo. Mortgage Company License; trust-agreement provisions pending verification"
},
"Massachusetts": {
"verified": true,
"tagline": "Massachusetts licenses mortgage lending tightly on the consumer side — the BPL boundary is the thing to confirm.",
"summary": "The Mortgage Lender License regime governs residential lending; business-purpose treatment turns on how the loan and collateral are classified.",
"blocks": [
{
"h": "Lender licensing",
"p": "Massachusetts operates a Mortgage Lender License / Mortgage Broker License regime through the Division of Banks, governing residential mortgage activity. Its application to business-purpose, non-owner-occupied loans is under verification — classification of loan purpose and collateral decides the lane."
},
{
"h": "What it means for you",
"p": "A consumer-protective state with active enforcement: get the classification right up front, and keep fund handling clean enough to survive a look."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Mass. Mortgage Lender License (Div. of Banks) — BPL applicability pending verification"
},
"New Mexico": {
"verified": true,
"tagline": "New Mexico's Mortgage Loan Company license frames the lending lane.",
"summary": "Licensing runs through the Mortgage Loan Company License; business-purpose applicability is the open item.",
"blocks": [
{
"h": "Lender licensing",
"p": "New Mexico licenses mortgage activity through the Mortgage Loan Company License (Financial Institutions Division). Its application to business-purpose, non-owner-occupied lending is under verification."
},
{
"h": "What it means for you",
"p": "Posture-check before scaling; segregated, documented fund handling is the constant either way."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "N.M. Mortgage Loan Company License — BPL applicability pending verification"
},
"Connecticut": {
"verified": true,
"tagline": "Connecticut licenses the residential lane and registers the exempt one.",
"summary": "Mortgage Lender licensing runs through NMLS via the Department of Banking — and even exempt companies register to sponsor licensed staff.",
"blocks": [
{
"h": "Lender licensing",
"p": "Connecticut operates a Mortgage Lender License regime through the Department of Banking on NMLS, alongside an Exempt Mortgage Company Registration — notable because registering as exempt is itself a filing, not a free pass, and doesn't constitute a determination of exemption. BPL applicability is under verification."
},
{
"h": "What it means for you",
"p": "Even the exemption is paperwork here. Confirm your lane formally, and keep fund handling disciplined enough to match a registration-minded regulator."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Conn. Dept. of Banking — Mortgage Lender License; Exempt Mortgage Company Registration"
},
"Iowa": {
"verified": true,
"tagline": "Iowa's licensing trigger is the borrower's primary residence — even on a business-purpose loan.",
"summary": "A license is required for a business-purpose loan secured by the borrower's primary residence; the Iowa Mortgage Banker License is the lane.",
"blocks": [
{
"h": "Lender licensing",
"p": "Iowa requires a license to make a business-purpose loan when the collateral is the borrower's primary residence — a trap on cash-out BPL deals where the flipper pledges their own home. License lane: the Iowa Mortgage Banker License. Pure investment-property BPL sits outside that trigger."
},
{
"h": "What it means for you",
"p": "Underwrite the collateral's occupancy, not just the loan's purpose. A side-pledge of a primary residence changes your licensing posture."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Iowa Mortgage Banker License — primary-residence trigger per practitioner guidance"
},
"Kansas": {
"verified": true,
"tagline": "Kansas triggers on the borrower's primary residence — and on rate, above 12%.",
"summary": "A license attaches to business-purpose loans secured by a primary residence, and supervised-lender licensing attaches to loans priced above 12%.",
"blocks": [
{
"h": "Lender licensing",
"p": "Kansas requires a license for business-purpose loans secured by the borrower's primary residence, and its Supervised Lender framework attaches to loans above a 12% rate — squarely relevant to private-money pricing. Verify which lane your book triggers."
},
{
"h": "What it means for you",
"p": "At hard-money rates, the 12% supervised-lender line matters even on deals that feel commercial. Posture-check before scaling."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Kan. supervised-lender framework (UCCC); primary-residence trigger per practitioner guidance"
},
"West Virginia": {
"verified": true,
"tagline": "West Virginia licenses lenders and brokers by statute, with enumerated exemptions.",
"summary": "W. Va. Code §31-17-2 requires licensure for mortgage lenders and brokers, with specific exemptions including federally insured depositories.",
"blocks": [
{
"h": "Lender licensing",
"p": "W. Va. Code §31-17-2 requires a license for mortgage lenders and broker-originators, with enumerated exemptions (federally insured depositories, certain nonprofits, securitization holders under conditions). License lanes: the WV Mortgage Lender License and WV Mortgage Broker License. BPL applicability under verification."
},
{
"h": "What it means for you",
"p": "The statute names who's in and who's out — read your structure against the exemption list before lending, and keep funds segregated either way."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "W. Va. Code §31-17-2"
},
"Wyoming": {
"verified": true,
"tagline": "Wyoming splits the lanes: mortgage lending and consumer lending each carry their own license.",
"summary": "The Wyoming Mortgage Lender/Broker License and the Consumer Lender License define the two lanes; BPL treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Wyoming licenses through the Mortgage Lender/Broker License and a separate Consumer Lender License (Division of Banking). Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "Two lanes, two filings — confirm which your book touches, and keep the fund chain clean in both."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Wyo. Mortgage Lender/Broker License; Consumer Lender License"
},
"Alaska": {
"verified": true,
"tagline": "Alaska runs a combined Mortgage Broker/Lender license.",
"summary": "The Alaska Mortgage Broker/Lender License is the lane; business-purpose treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Alaska licenses through the combined Alaska Mortgage Broker/Lender License (Division of Banking & Securities). Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "Posture-check before scaling; segregated, documented fund handling is the constant."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Alaska Mortgage Broker/Lender License — BPL applicability pending verification"
},
"Montana": {
"verified": true,
"tagline": "Montana licenses mortgage lending and servicing as separate lanes.",
"summary": "The Montana Mortgage Lender License (with a separate Servicer License) defines the lanes; BPL treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Montana licenses through the Montana Mortgage Lender License, with a separate Mortgage Servicer License for servicing. Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "If you service what you originate, both lanes may apply. Confirm posture, segregate funds."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Mont. Mortgage Lender License; Mortgage Servicer License"
},
"Nebraska": {
"verified": true,
"tagline": "Nebraska's lanes are the Mortgage Banker license and the Loan Broker filing.",
"summary": "The Nebraska Mortgage Banker License and a separate Loan Broker framework define the lanes; BPL treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Nebraska licenses through the Nebraska Mortgage Banker License, with a separate Loan Broker framework. Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "Confirm the lane that matches your model — banker vs broker — before scaling."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Neb. Mortgage Banker License; Loan Broker framework"
},
"Mississippi": {
"verified": true,
"tagline": "Mississippi runs a Mortgage Lender License through the Department of Banking.",
"summary": "The Mississippi Mortgage Lender License is the lane; business-purpose treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Mississippi licenses through the Mississippi Mortgage Lender License (Dept. of Banking & Consumer Finance). Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "Posture-check, then keep the fund chain segregated and documented."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Miss. Mortgage Lender License — BPL applicability pending verification"
},
"Indiana": {
"verified": true,
"tagline": "Indiana splits mortgage oversight between two regulators — SOS and DFI.",
"summary": "Licensing runs through both the Secretary of State and the Department of Financial Institutions, depending on activity; BPL treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Indiana is unusual in splitting mortgage oversight between the Secretary of State (loan brokers) and the Department of Financial Institutions (lenders) — two regulators, two filings, depending on your activity. Business-purpose applicability is under verification."
},
{
"h": "What it means for you",
"p": "Map your activity to the right regulator first — broker-side and lender-side filings live in different buildings here."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "Ind. SOS (loan broker) / DFI (lender) — BPL applicability pending verification"
},
"Louisiana": {
"verified": true,
"tagline": "Louisiana sits on the may-require-licensing list for residential-collateral BPL.",
"summary": "Practitioner guidance flags Louisiana licensing for non-owner-occupied business-purpose residential loans; exact lane under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "Practitioner licensing guidance places Louisiana among states where non-owner-occupied, business-purpose residential mortgage lending may require licensing under its residential mortgage lending framework. Exact provisions under verification."
},
{
"h": "What it means for you",
"p": "Treat residential-collateral BPL here as licensed-until-confirmed-otherwise, and keep fund handling disciplined regardless."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "La. residential mortgage lending framework — pending verification"
},
"New Hampshire": {
"verified": true,
"tagline": "New Hampshire licenses mortgage activity through its Banking Department.",
"summary": "Mortgage banker/broker licensing runs through the NH Banking Department; business-purpose treatment under verification.",
"blocks": [
{
"h": "Lender licensing",
"p": "New Hampshire licenses mortgage bankers and brokers through the NH Banking Department. Business-purpose applicability and exemptions are under verification."
},
{
"h": "What it means for you",
"p": "Posture-check before scaling; the fund-handling discipline is the constant in every state."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "NH Banking Dept. licensing — BPL applicability pending verification"
}
},
"defaultRecord": {
"verified": false,
"tagline": "Profile in legal verification — here's what holds true in every state.",
"summary": "State profile in legal verification. Universal fund-holding principles apply.",
"blocks": [
{
"h": "What applies everywhere",
"p": "Whoever holds your loan funds must keep them segregated, never commingled, and disbursed only for their stated purpose — and the holder's own licensing (escrow, money transmission) must be clean in this state."
},
{
"h": "Where PHOCIS fits",
"p": "Segregated sub-accounts at a regulated bank, disbursed only against approved draws, reconciled daily, with a clean audit trail."
}
],
"cite": "State-specific citations pending counsel verification"
},
"TIERS": {
"t1": [
"California",
"Nevada",
"Arizona"
],
"t2": [
"Texas",
"New York",
"Florida",
"Colorado",
"Michigan",
"Wisconsin",
"Maryland",
"Minnesota",
"New Jersey",
"Pennsylvania",
"Illinois",
"Delaware",
"Oklahoma",
"South Carolina",
"South Dakota",
"Vermont",
"Washington",
"Georgia",
"Arkansas",
"Virginia"
],
"t3": [
"North Dakota",
"Utah",
"Oregon",
"Idaho",
"Iowa",
"Kansas",
"Rhode Island",
"North Carolina",
"Alabama",
"Kentucky",
"Tennessee",
"Maine",
"West Virginia"
],
"t4": [
"Hawaii",
"Ohio",
"Missouri",
"Massachusetts",
"New Mexico",
"Connecticut",
"Wyoming",
"Alaska",
"Montana",
"Nebraska",
"Mississippi",
"Indiana",
"Louisiana",
"New Hampshire"
]
},
"TIER_NAMES": {
"t1": "Tier 1 · Mandated fund control",
"t2": "Tier 2 · Statutory trust state",
"t3": "Tier 3 · Licensing-trigger state",
"t4": "Tier 4 · Standard framework"
},
"TIER_OF": {
"California": "t1",
"Nevada": "t1",
"Arizona": "t1",
"Texas": "t2",
"New York": "t2",
"Florida": "t2",
"Colorado": "t2",
"Michigan": "t2",
"Wisconsin": "t2",
"Maryland": "t2",
"Minnesota": "t2",
"New Jersey": "t2",
"Pennsylvania": "t2",
"Illinois": "t2",
"Delaware": "t2",
"Oklahoma": "t2",
"South Carolina": "t2",
"South Dakota": "t2",
"Vermont": "t2",
"Washington": "t2",
"Georgia": "t2",
"Arkansas": "t2",
"Virginia": "t2",
"North Dakota": "t3",
"Utah": "t3",
"Oregon": "t3",
"Idaho": "t3",
"Iowa": "t3",
"Kansas": "t3",
"Rhode Island": "t3",
"North Carolina": "t3",
"Alabama": "t3",
"Kentucky": "t3",
"Tennessee": "t3",
"Maine": "t3",
"West Virginia": "t3",
"Hawaii": "t4",
"Ohio": "t4",
"Missouri": "t4",
"Massachusetts": "t4",
"New Mexico": "t4",
"Connecticut": "t4",
"Wyoming": "t4",
"Alaska": "t4",
"Montana": "t4",
"Nebraska": "t4",
"Mississippi": "t4",
"Indiana": "t4",
"Louisiana": "t4",
"New Hampshire": "t4"
}
}