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#1820560 - 06/05/13 05:58 PM adding land
Truffle Royale Offline

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borrowers are doing cash out refi to purchase adjacent acerage.
Questioning whether adding land would knock this into HI along the lines of landscaping = HI?
It's improving the land the dwelling is located on, isn't it?
Or do I just have a refi?

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#1820564 - 06/05/13 06:01 PM Re: adding land Truffle Royale
raitchjay Offline
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OK
It's a refi in my book. Home improvement to me has to involve creating/building something that wasn't there prior to the loan.
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#1820572 - 06/05/13 06:06 PM Re: adding land Truffle Royale
raitchjay Offline
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Well...that wasn't the greatest reasoning ever that i just gave. I'm just saying: buying land that doesn't have a dwelling on it doesn't count as a purchase or home improvement to me, even if the land is adjacent to the land that the dwelling sits on. The real property on which the dwelling sits is the same (unimproved) piece of land it was prior to your loan (IMO).
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#1820584 - 06/05/13 06:12 PM Re: adding land Truffle Royale
Happy Birthday Kathleen O. Blanchard Offline

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I agree re refi. No improvements taking place (improvements require some activity).
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#1820590 - 06/05/13 06:17 PM Re: adding land Truffle Royale
Truffle Royale Offline

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I can obviously argue this both ways which is why I'm asking.

On the one hand, an argument can be made for straight refi.
On the other, you're improving the value by adding more land so how is this not HI when adding bushes and grass would be?
See why I'm torn?

Any other opinions?

eta: where does it say HI requires activity?
Last edited by Truffle Royale; 06/05/13 06:18 PM.
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#1820593 - 06/05/13 06:20 PM Re: adding land Truffle Royale
raitchjay Offline
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The definition of HI includes "the real property on which the dwelling sits". Buying a piece of property that sits adjacent to the current dwelling and lot doesn't change the parameters of what your "real property" is. It's the real property on which the dwelling sits, which does not include the piece of land that your loan is purchasing.
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#1820596 - 06/05/13 06:21 PM Re: adding land Truffle Royale
raitchjay Offline
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OK
Nor does it meet the "repairing, rehabilitating, or improving a dwelling or the real property on which it is located".
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#1820615 - 06/05/13 06:38 PM Re: adding land Truffle Royale
Truffle Royale Offline

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Remember I'm playing devil's advocate here (or an ornery examiner wink )
It seems to me that doubling the size of the land could fall under improving the real property on which the dwelling is located.

But seeing as how no one is taking that side, I'll go with refi.

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#1820736 - 06/05/13 08:27 PM Re: adding land Truffle Royale
hmdagal Offline
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Assuming the adjacent land is a different parcel, I would also argue that it isn't the property on which the dwelling is located. Therefore not home improvement.

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#1820834 - 06/05/13 11:34 PM Re: adding land Truffle Royale
Happy Birthday Kathleen O. Blanchard Offline

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I do not see where adding more land mets the HMDA definition of home improvement:


Home Improvement Loan
A home improvement loan is (a) any dwelling-secured loan to be used, at least in part, for repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located, and (b) any non-dwelling-secured loan (i) that is to be used, at least in part, for one or more of those purposes and (ii) that is classified as a home improvement loan by the institution.
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#1820984 - 06/06/13 03:09 PM Re: adding land hmdagal
RR Joker Offline
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Originally Posted By: hmdagal
Assuming the adjacent land is a different parcel, I would also argue that it isn't the property on which the dwelling is located. Therefore not home improvement.


This is the key, IMO.
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#1821005 - 06/06/13 03:30 PM Re: adding land Truffle Royale
Truffle Royale Offline

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^^^and the piece I was missing in my thought process.
Thanks, hmdagal!

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