In 2007, we did an 12 month interim loan to build condos. In March, 2008, the customer refinanced that loan into another 12 month interim loan for more money due to plan changes. Once the condos are built, we will roll the interim loan into perm phase with a mod. I need to HMDA the interim phase. Will I need to HMDA it as a purchase or a refi? Now, to add to the scenerio...in July, 2008, the customer came back in requesting additional money on the interim. We did the new interim as a second lien just for the additional funds needed, to mature at the same time the 1st lien. It too will be rolling to the perm phase with a mod. Would the second lien be reportable...as improvements???

These both sound like temporary loans.

I agree with hmdagal - - - Sounds like
1. Construction loan - intended to be paid with Perm Financing
2. "Cost Overrun" on construction as a 2nd lien - intended to be paid with Perm Financing
So these would not be reportable.
BUT - If the intent all along was to modify and not to "Roll" into a new Perm loan, then this might be a Construction / Perm Loan and therefore reportable. We don't do const/perm loans so I am not familiar with them.

Both loans will be modified into Perm with a modification, not with a new note. We have been told that we can not HMDA modifications; therefore, we need to HMDA it at the interim phase.

If you are knowingly making this loan for a X months and then converting it to a permanent terms by modifying it, then IMO the loan is not temporary/interim financing. It is a permanent loan with the term of the loan agreed upon at consummation and should be reported at that time.

As Dan said - IF the commitment at the origination of the first Construction loan was to modify it to take care of perm financing. Then the first loan at origination is evidently intended to be the Perm financing ( a Const / Perm loan ) and it is reportable.

The perm phase was not approved at the time of the interim phase. Both loans actually state that the source of repayment will be sale of the condos or rental and/or personal income. Since there is no mention of perm financing...does that mean I don't need to HMDA report? THAT WOULD BE GREAT!!!!

I wouldn't report them.

I agree with hmdagal - temp financing and not reportable