I am reviewing HMDA for a bank we just purchased and their construction/perm loans are not originated the same as ours. They have a one-time closing and their notes include both interim (interest) terms and perm terms.

The GIR guide states that: For a construction/permanent loan, the institution reports either the settlement or closing date, or the date the loan converts to the permanent financing. So, that I get.

However, it goes on to say: Notwithstanding this flexibility in regarding the use of the closing date in connection with reporting the date action was taken, the year in which an origination goes to closing is the year in which the institution must report the origination. This confuses me. If the loan goes to closing in one year and converts to permanent financing in another, then the year the construction/perm closes should be the reportable year. What happened to the reverting to permanent financing option?

Is it still there? Or, am I reading too much into that statement and just confusing myself?

I didn't realize you had that option in HMDA. -- Learn something new everyday!

Looks like you'd be better off if you just use the initial closing date as your action date rather than the date that they go perm. (That's what we do anyways and it's not nearly as confusing as what you're talking about.)

When you convert to perm do you just change it in the system?

Also, what do you report for purpose? Refi or purchase?

Thanks for your help! Still a newbie~

Just for fun, this is what HMDA Help had to say:

We would suggest reporting the closing date as the action date for those
instances when the conversion to perm takes place in another year, this
would make the
LAR HMDA reportable at its permanent stage.

Do you mean change it in HMDA? - No.

These are reported as Purchases.