Borrower refinances 2 multifamily projects & contributes a portion of the cashout proceeds towards the construction of a 3 multifamily project. The amount extracted from the refis & contributed to improvements may or may not be sufficient to complete construction of this 3rd project.

For HMDA how would you classify the purpose of this darn loan?

Even though the $$ may not be sufficient to complete the project? That is not what I wanted to hear. If anything I was thinking improvment, but it is really not a dwelling, yet!

Within the year I'm sure that I will have another reportable loan on this 3rd project (long term takout) and that will be my purchase.

I HATE HMDA! Weekend needed -

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I HATE HMDA!

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But it keeps us on our toes, or is it ears?

My previous answer was based on the fact this appears to be a const/perm loan (you didn't indicate the new loan is a temporary loan) secured by a dwelling other than the dwelling being constructed/purchased. If the proceeds do not complete the project that doesn't change the purpose of the proceeds, that just means the borrower didn't plan correctly.

No, I'm doing 2 new loans. Originally these loans were for purchase of multifamily dwellings and the refinance is to lower the rate AND extract cash, some of which will be used in the development of a 3rd multifamily project.

Do you still think these new loans, yes I have 2 of them (double the violations) are for the purpose of a purchase?

Oh, thank heavens you are back

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which will be used in the development of a 3rd multifamily project.

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Are the proceed to construct the project or for developing the land?

If a portion of the proceeds are to construct the dwelling(s) then I will stick with my original answer. If the proceeds are for the land development then I would relent and report as a refinance.

The loan write-up says "finish the 3rd project" so guess I go along with purchase for HMDA purpose. (Oh, wait until I share this one with the commercial lenders, heh, heh.)

Thanks for your patience I'm rather slow today!