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#1645361 - 01/03/12 06:07 PM CRA Small Business Residential Property
DoorKey Offline
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Wisconsin
For a residential loan, under $1,000,000, made to a business to purchase a multi-family property, this would be HMDA reportable but not CRA reportable. Correct?

A refinance of a multi-family residential loan, under $1,000.000, made to a business would be both HMDA and CRA reportable. Is this correct?

A renewal of a multi-family residential loan, under $1,000.000, made to a business where the existing note is not satisfied would not be reportable to HMDA or CRA. Correct?
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#1645573 - 01/03/12 09:09 PM Re: CRA Small Business Residential Property DoorKey
Princess Romeo Offline

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The loan itself would be reported on the HMDA LAR and NOT the CRA LR. However, if the loan has community development merit (i.e. low/mod income housing), then you can also count it as a Community Development loan.

If the loan is not HMDA report-able, it would still NOT be reported on the CRA LR because your Call Report Code would NOT be 1e or 4a. But you may be able to count it as Community Development if it has CD merit.
Last edited by Princess Romeo; 01/03/12 09:11 PM.
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#1645610 - 01/03/12 09:56 PM Re: CRA Small Business Residential Property DoorKey
Kathleen O. Blanchard Offline

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The refi rule for allowing HMDA reportable loans to be CRA as well applies to loans that were not originally HMDA reportable but are being dragged into HMDA due to the broad HMDA refi rule (small business loans that are only HMDA because of being secured by residential real estate and being refinanced, not that were originally a purchase or improvement that is a HMDA purpose).

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#1651076 - 01/13/12 07:11 PM Re: CRA Small Business Residential Property Kathleen O. Blanchard
Chocaholic Offline
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Kaybee,
I am confused by your statement in the (...) could you please give an example..

Sub-set questions
We have loan to a small business ( collateral property is multi-use, 1/3 retail store 2/3rds residence of owner) However, all income derived by business owner comes from the store.. this is being refinanced.. does it meet test for CRA?

We have a single purpose entity (LLC) whose sole purpose is to collect rents. We have made the entity a small business loan (under $1 mil) and have taken the collateral as security ( multi-use property both residential & retail stores).. Does this meet CRA test?

Would it make a difference for CRA if collateral is all retail stores for example?

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#1651253 - 01/15/12 05:33 AM Re: CRA Small Business Residential Property Chocaholic
Kathleen O. Blanchard Offline

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Originally Posted By: Chocaholic
Kaybee,
I am confused by your statement in the (...) could you please give an example..

Sub-set questions
We have loan to a small business ( collateral property is multi-use, 1/3 retail store 2/3rds residence of owner) However, all income derived by business owner comes from the store.. this is being refinanced.. does it meet test for CRA?


Depends upon how you classified the loan on the call report. Is it classified as secured by residential real estate or non-farm, non-residential real estate?


We have a single purpose entity (LLC) whose sole purpose is to collect rents. We have made the entity a small business loan (under $1 mil) and have taken the collateral as security ( multi-use property both residential & retail stores).. Does this meet CRA test?


Again depends upon how you classified the property, residential or non-farm non-residential.


Would it make a difference for CRA if collateral is all retail stores for example?


Yes because retail stores are non-farm non-residential and fall into lines 1e1/1e2 on the call report and are therefore small business if a million or less.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1651307 - 01/16/12 05:45 PM Re: CRA Small Business Residential Property Kathleen O. Blanchard
Chocaholic Offline
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Joined: Aug 2005
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Northwest
Sub-set questions
We have loan to a small business ( collateral property is multi-use, 1/3 retail store 2/3rds residence of owner) However, all income derived by business owner comes from the store.. this is being refinanced.. does it meet test for CRA?


Depends upon how you classified the loan on the call report. Is it classified as secured by residential real estate or non-farm, non-residential real estate?

This case residential, so not CRA? We are a small bank, could we track this and use it as additional evidence of meeting needs of small business?

We have a single purpose entity (LLC) whose sole purpose is to collect rents. We have made the entity a small business loan (under $1 mil) and have taken the collateral as security ( multi-use property both residential & retail stores).. Does this meet CRA test?


Again depends upon how you classified the property, residential or non-farm non-residential. These would be classed as non-residential... so yes, for CRA? Would it make a difference if the owner rented one of the retail units ?
Last edited by Chocaholic; 01/16/12 05:50 PM.
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#1651309 - 01/16/12 06:20 PM Re: CRA Small Business Residential Property Chocaholic
Kathleen O. Blanchard Offline

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Originally Posted By: Chocaholic
Sub-set questions
We have loan to a small business ( collateral property is multi-use, 1/3 retail store 2/3rds residence of owner) However, all income derived by business owner comes from the store.. this is being refinanced.. does it meet test for CRA?


Depends upon how you classified the loan on the call report. Is it classified as secured by residential real estate or non-farm, non-residential real estate?

This case residential, so not CRA? We are a small bank, could we track this and use it as additional evidence of meeting needs of small business?

You can categorize as CRA Type 3, which is not submitted but presented in an exam. If the loan falls into HMDA reporting it won't be type 1 OR 3 unless it is a refi.


We have a single purpose entity (LLC) whose sole purpose is to collect rents. We have made the entity a small business loan (under $1 mil) and have taken the collateral as security ( multi-use property both residential & retail stores).. Does this meet CRA test?


Again depends upon how you classified the property, residential or non-farm non-residential. These would be classed as non-residential... so yes, for CRA? Would it make a difference if the owner rented one of the retail units ?


This would be a small business loan (CRA Type 1, assuming it is $1 million or less) because the property is not residential. It does not matter that one of the stores is owner occupied.

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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1652193 - 01/18/12 05:48 PM Re: CRA Small Business Residential Property Kathleen O. Blanchard
Chocaholic Offline
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Thank you so much for all your help!

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