Loan term is short term for home purchase that is intended to be fixed up and sold. Loan officer says this a temporary loan because they are anticpating that the property will not sell at the end of the loan term.

I say it is a short term loan but not temporary financing. I say the loan should be reported as a home purchase loan and then if it is not sold at the end of the loan term, the new loan would be reported as a refinancing.

Any thoughts?

I agree with you auditangel. A loan is temporary if it is 'intended' to be replaced by permanent financing. Crystal ball expectations do not qualify as intended. Some banks require a loan commitment in the file before they will treat the initial loan as temporary.

From the HMDA FAQs:

Temporary Financing. When is a loan "temporary financing" such that it is exempt from reporting?

Answer: The regulation lists as examples of temporary financing construction loans and bridge loans. See 203.4(d)(3). Construction and bridge loans are illustrative, not exclusive, examples of temporary financing. The examples indicate that financing is temporary if it is designed to be replaced by permanent financing of a much longer term. A loan is not temporary financing merely because its term is short. For example, a lender may make a loan with a 1-year term to enable an investor to purchase a home, renovate it, and re-sell it before the term expires. Such a loan must be reported as a home purchase loan. See 203.2(h).

Thanks!