Are loans to repair and resell considered temporary financing?

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Are loans to repair and resell considered temporary financing?
by: Lucy Griffin, BOL Guru
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Question: We have customers (corporate and individual)who borrow to finance the purchase of 1-4 family residences for the purposes of repair and resell. Would this be considered temporary financing?

Answer: If the purpose is business, then you don't need to be concerned with Regulations Z and X. The primary issues would be Regulations B and C. Avoiding discrimination applies in any credit situation. As to whether the transaction is temporary financing for purposes of reporting on the HMDA LAR, you need only look to Regulation C.

First published on BankersOnline.com 5/06/02

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