The bank had a loan approved to rehab a residential property that was not occuppied. The proceeds were to be used for home improvement. The customer withdrew the loan because the customer could not get the zoning changed for a bed and breakfast. Is this HMDA Reportable?

Was this actually for home improvement or converting the property to a B&B?

I believe to convert to the bed and breakfast.

If that is the case then I would not report the loan. I would consider it a business purpose loan not secured by a dwelling (based on its intended primary use) similar to a loan to convert it into office space.

Once it is converted then you would have to look the multiple use property discussion found in the GIR for proper reporting requirements at that time.