We originated a loan (refinancing) to a customer to pay off her father-in-law (owner financing evidenced with a DOT) and cash out to finish horse stalls in the barn. The collateral is an "apartment" (basically a 2 bedroom home (is 840 sq ft) with a horse barn (1,560 sq ft) all under one roof. From the front the building looks like a home. The barn is attached to the home just like a garage would be. The building is used as a second home and for raising horses for barrel racing.

To report or to not report....that is the question...

Generally improvements to the property with a dwelling would be home improvement. However, this is a multi-use building and the improvements only affect the barn portion. So I am thinking this doesn't meet the multi-use test for home improvement.

Would this be reportable as a refinancing since a portion of the building is a second home or could this still be a home improvement loan? Or do we not report this at all?

I would argue that you don't have a dwelling. It is a mixed use building, partially residential and partially commercial (assuming the horses are a business and not a hobby). You can use any reasonable means to determine what the primary purpose of the property is. Based on your square footage, it appears the barn is larger than the residence, so I would say it's primarily a commercial property.

No dwelling = no HMDA

I agree re the mixed use if it holds up, but my only question, as a non-barrel racing person (commence laughing now at the very thought of that), are the horses and barrel racing purely personal use or is this a business activity for third parties (training and selling the horses for example).

Checked the tax return...they have a Schedule C for horse training. So no for HMDA. Thanks

Just one question - most barns are a lot cheaper than homes (limited plumbing, insulation, heat/cool, division of space, etc.) LTC, is the value of the home greater than the barn?

You do not have to look at value. You consider things like square footage or income (if the residential piece is rental ).