Thread Options
#2088396 - 07/15/16 08:09 PM Refiance Home and New Money to Build Shop
MSB05MS Offline
Member
Joined: Jan 2008
Posts: 92
We have a loan that is refinance of dwelling with cash out to build a shop. The shop will be built beside the borrower's house. This loan is set up to draw all of the cash out funds at closing and the repayment is permanent financing. Is the shop considered home improvement the same as a pool? This will improve the home property. HMDA reportable as home improvement or just refinance?

Return to Top
HMDA

   
HMDA Academy
#2088400 - 07/15/16 08:21 PM Re: Refiance Home and New Money to Build Shop MSB05MS
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Assuming this is a personal use "shop" and avoiding business use discussions, yes under current rules,this will be home improvement.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#2088542 - 07/18/16 03:57 PM Re: Refiance Home and New Money to Build Shop MSB05MS
Colorado Girl Offline
Member
Joined: Mar 2013
Posts: 67
It kind of sounds like temporary financing, I would be inclined to report this once the permanent financing replaced it. I have seen threads that support the permanent financing that replaces a HI purpose loan should be reported as a HI purpose (I think the argument is that the applicants requested the funds to improve the property with one request - the FI breaks it into two loans); I've also seen where the HI purpose gets lost with the temporary financing and the permanent financing is reported as a refinance.

Return to Top
#2088562 - 07/18/16 04:56 PM Re: Refiance Home and New Money to Build Shop MSB05MS
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
Yes, if it is two loans, the first will be temporary.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top

Moderator:  SMQ, CRCM