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#1822066 - 06/10/13 06:49 PM 6 month extension followed by 3 year term
Pamlissa Offline
100 Club
Joined: Oct 2009
Posts: 115
Rosemont, IL
I'm pretty sure I am right about this, but it never hurts to get another opinion as I am fairly new to the small business side of HMDA!
This loan closed in May. It was for an extension of a 6-month draw note, which will now mature in Nov 2013. Payments are interest-only. The purpose of the loan is HI, to rehab an apartment in a building the borrower owns. In November, the loan will be converted into a 3-year term loan with principal and interest payments, maturing November 2016. The improvements will be completed before the conversion.
IMO, I think that we should report the November loan once the draw is converted into a term loan.
Anyone else?

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#1822107 - 06/10/13 08:11 PM Re: 6 month extension followed by 3 year term Pamlissa
raitchjay Online
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Joined: Oct 2009
Posts: 8,830
OK
I agree. The first loan is temporary financing; the November loan will convert it to permanent financing. Whether you should report that loan as home improvement or a refinance is up to interpretation. IMO, it should be reported as a refinance; but we recently had a large discussion on this and it was about 50/50 refi vs. home improvement.
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#1822125 - 06/10/13 08:31 PM Re: 6 month extension followed by 3 year term raitchjay
Pamlissa Offline
100 Club
Joined: Oct 2009
Posts: 115
Rosemont, IL
Thanks!
And for what it's worth, I believe I will report the loan in November as a refi, as all improvement will be completed.

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