We have a loan where a customer owned land with a large shed on it. The purpose of the loan was to add a well, septic, electric, etc to remodel the shed so he can live in it.

Is this a home improvement loan even though the propery is not yet a home? My instincts say yes, but I'd like to hear some other thoughts.

If he's going to use it as a primary residence, how is it not a home? I would say this is the same as any other 'converted' building and becoming a residence in purpose overrides the original non-residential construction.

Thank you - I needed some reassurance!

No problem. I've had the same conversation with multiple LOs here in both directions - how converting a barn to a house IS HMDA and how converting a house to an office is not.