Does HMDA Apply to THIS Business Loan?
by Dan Persfull, BOL Guru Guru BIOS
Question: Does HMDA apply to a business loan if it is going to be secured by residential real estate (investment rental property) that is owned by an individual? We have a borrower who wants to pledge residential real estate for a line of credit to be used for business purposes.
Answer: You really have not given enough information to make a definitive answer, but it does not sound like you have a HMDA reportable loan.
Does the loan meet the definition of a refinance, is any of the proceeds to purchase or improve a dwelling, is the line of credit open-end or closed-end?
All open-end lines of credit are exempt from HMDA reporting, so if you do not report other open-end lines of credit I would rely on that exemption.
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