I recently took over at an institution, where I was told only to include loans I know will qualify as CRA. First and foremost I disagree with this philosophy. IMO it is up to the examiner to tell me why I will not qualify, but that is another issue altogether.

I have been reviewing loans that the previous person had included for CRA credit. A few of the loans are development (IE building of construction of commercial properties) in a moderate income MSA. Using the examples from the 2007 Q&A, I don't believe that the development alone qualifies the loans as CRA credits. Does anyone agree or disagree? Any input would be appreciated.

Fist of all, we are talking about community development credit right?

I would find out a little more about the project. What is the building for? will the tenant of the building be providing much needed services to the area? Will there be permanent jobs created as a result of the building? Wll the new building do something to revitalize and stabilize the area?

If you can build your case on a yes answer to any of the above, I would certainly include for community development credit.

I apologize Shasta. I went to change the veriage in my post but noticed you had already replied. I did not mean CRA credit. It would obviously count toward CRA credit as it is now on the loan register. I meant would this loan be a "community development" loan. My problem is that we paid for the development loan. We do not know what services or employment standards the tenant will be. The property will be sold.

IMO it will depend on the development. I don't think you will get credit from the stand point of job creation, but if the development will stabalize or improve an LMI area then you should get consideration.

To your first point. If you give them everything and let them sort it out, you are saying to the examiners that you do not understand CRA. Or you do not care about the exam or their time. This will hurt you during an exam especially of you are trying to fight for a project that is in the gray area. If you give them only those items that truly qualify or in the gray area; IMO they will give you more credance when you are disucssing the ones that are in the gray area. i have ahd examiner after examiner tell me this.

I am not saying that I would give an examiner anything. I am saying if I think that something would be remotely close to getting CRA credit I would give them the loan, and let them decide. My reasoning is, if I am making the decision and not letting them see the "grey" cases then I am limiting the potential qualifying credits.

CompDat, It's hard to really say without knowing the area that the building is in.

IMO, it sounds as though you may be able to get credit if you can say that the new building will revitalize and stabilize the area. That will come down to knowing your assessment area, and only you can do that.

The loan may not get credit just by virtue of being in a mod area but if you can provide something to support your claim that it will help the area, you may have a shot.