HMDA Questions:

In using the logic that a construction to perm is reportable as a purchase when you take land as collateral but in the end it will be a residential property. I have a couple questions as to if the two scenarios below are reportable.

Two Scenarios:

1. A loan to purchase a warehouse with additional funds to improve the property and convert it into a 20 unit apartment building? The collateral is the warehouse but in the end will be an apartment building. IF it is considered HMDA reportable, it would be a multi-purpose loan, to purchase and improve, so improve would trump the purchase? OR, would this NOT be considered HMDA as it is NOT a loan to actually purchase, refinance, or improve an existing dwelling?

2. A loan to refinance existing debt, the loan being refinanced originally funded the purchase and conversion of an abandoned church into a 17 unit apt. building, the additional proceeds are being used to convert a vacant school into a 4 unit apartment building. The Collateral is the vacant school, but in the end will be an apartment building.
If scenario one is reportable then would this be reportable as a refinance under HMDA?

How are the loans structured? Are you doing one loan for the purchase and rehab or two seperate? I'm just wondering if they are temporary.

Both scenarios IMHO are for the purchase (construction) of dwellings therefore reportable as a home purchases. Unless they meet one of the exemptions such as temporary financing mentioned by Rizz.


A home purchase always trumps home improvement or refinancing for reporting purposes.

Thanks to both of you..

Here are two more scenarios that I'd like an opinion on if you'd care to that a stab at it.

· Purpose of new loan is to paydown a portion of an existing loan secured by a dwelling and new loan is secured by a dwelling. Is this a HMDA reportable loan under the refinance definition?

· Purpose of new loan is to term out the outstanding balance on a LOC that was secured by a dwelling and replacing it with a new loan secured by a dwelling, however the LOC is not closed it will remain open for future advances. Is this a HMDA loan reportable loan under the refinance definition?

Neither of those scenarios are satisfying an existing obligation, so would not be reportable.

No, not reportable as refi.

However, what if customer has LOC to do construction of new dwelling, terms out majority of line, but leaves a small balance in anticipation of a few more things to do to house, i.e. landscaping? Customer may plan to simply pay down LOC when he finishes everything or transfer to a HELOC. Wouldn't we still report the termed out portion as a purchase for HMDA even though it doesn't satisfy the initial construction loan? I don't recall ever seeing that requirement for a purchase, but I can see a lender doing this.

IMHO doing what you describe would not be converting a construction loan to permanent financing because the construction loan still exists.