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#2101368 - 10/01/16 08:52 PM HMDA reportable?
Puzzled Offline
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Joined: Dec 2012
Posts: 157
I am reviewing a purchase/rehab loan where the property being purchased is currently being used as a multi-family property; however, the purchasers are intending to convert the property to an extended stay hotel (not reportable). I am thinking that this transaction would be reportable, as the property is currently being used as a multi-family dwelling. The property has not yet been converted to an extended stay hotel. Thoughts on this situation?

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#2101379 - 10/03/16 12:03 PM Re: HMDA reportable? Puzzled
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
I am reviewing a purchase/rehab loan

If the rehab piece is the conversion to a hotel, I would not report as the purpose of the loan is to convert it to a non-reportable building.

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#2101435 - 10/03/16 04:34 PM Re: HMDA reportable? Puzzled
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Always look at what the building WILL BE when the loan proceeds are applied. If your loan will not only purchase the building, but also convert it into a hotel, then burke is right - not reportable.

If it's multiple loans and your loan is buying the multi-family dwelling and then someday they plan to get another loan to convert it to a hotel, I would report the first loan as a purchase for HMDA.
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David Dickinson
http://www.bankerscompliance.com

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#2101437 - 10/03/16 04:43 PM Re: HMDA reportable? Puzzled
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Always look at what the building WILL BE when the loan proceeds are applied.

This is the key that a lot of people overlook. What will the loan proceeds be used for?

FWIW I agree with burke & David.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2101747 - 10/05/16 04:30 AM Re: HMDA reportable? Puzzled
Puzzled Offline
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Joined: Dec 2012
Posts: 157
Thank you all for your responses-what you're saying makes sense!

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