Answer:
To the best of my knowledge Reg. Z never restricted the construction phases's term. It's just that if the construction phase exceeds 12 months then it does not qualify for the exemption in 1026.43.
(a) Scope. This section applies to any consumer credit transaction that is secured by a dwelling, as defined in ยง 1026.2(a)(19), including any real property attached to a dwelling, other than:
(iii) A construction phase of 12 months or less of a construction-to-permanent loan;