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#2113188 - 01/05/17 07:19 PM HMDA Home Purchase
HMDA CRA Gal Offline
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Joined: Sep 2009
Posts: 37
Good afternoon!

Our commercial area did a loan to an LLC (RE holding company) to purchase 1-4 family residence for business purpose as a vacation/entertainment property for the borrower's client. Our borrower owns the property. Would this be considered HMDA reportable as Home Purchase? And, if so, what would be the correct Owner Occupancy code? I always get confused on owner occupancy when our borrower is a business entity.

Any thoughts or comments are greatly appreciated! Thanks!

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#2113190 - 01/05/17 07:26 PM Re: HMDA Home Purchase HMDA CRA Gal
David Dickinson Offline
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David Dickinson
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Posts: 18,762
Central City, NE
Sounds like a rental but it also sounds like a hotel. Can you explain "vacation/entertainment property"? Is that a place lots of different people will stay at for short periods of time (like a hotel room) or will it be exclusive to one client (like a second home)?

If it's more of a hotel, then it would be transitory and not reported.
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#2113194 - 01/05/17 07:43 PM Re: HMDA Home Purchase HMDA CRA Gal
HMDA CRA Gal Offline
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Joined: Sep 2009
Posts: 37
Thanks for your reply! The property is a single family residence and it appears to be exclusive to one client for vacation purposes.

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#2113195 - 01/05/17 07:48 PM Re: HMDA Home Purchase HMDA CRA Gal
David Dickinson Offline
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David Dickinson
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Central City, NE
Sounds like a rental home then - even if $0 rent is charged.
I would call it a purchase and non-owner occupied.
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#2114581 - 01/18/17 05:43 PM Re: HMDA Home Purchase HMDA CRA Gal
Colorado Girl Offline
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Joined: Mar 2013
Posts: 67
I have separated in my mind that for HMDA reporting, I can purchase my primary, I can purchase my secondary, I can purchase someone else's primary (rental), but it's not reportable if I purchase someone else's secondary because it would either be 1) transitory (many people's secondary) OR 2) a gift. Am I way off base?
If I have to rent my second home, isn't it the same as a hotel/timeshare?

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#2114587 - 01/18/17 05:57 PM Re: HMDA Home Purchase Colorado Girl
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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If you use your second home for some period of time and rent it the rest of the time for vacation rentals, it is your second home. If you own a home that is exclusively rented out for short term vacation rentals it is a transitory residence and not HMDA reportable.

If you own a home that is rented out to be someone elses only residence, it is hmda reportable and not owner occuped (under current rules, not applicant/borrower occupied under revised rules).

In the original question in this thread, it seems odd that a company would buy a property to be used exclusively by a client for vacations. I think there is more to the story that would clarify reporting.
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#2114588 - 01/18/17 06:00 PM Re: HMDA Home Purchase HMDA CRA Gal
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
If it's your second/vacation home then it's a reportable dwelling secured loan if the loan is for the purchase, refinancing or improvement of a dwelling. You renting it during the time you are not occupying it does not qualify it as a transitory residence.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2114603 - 01/18/17 07:14 PM Re: HMDA Home Purchase HMDA CRA Gal
Colorado Girl Offline
Member
Joined: Mar 2013
Posts: 67
I don't think I worded that correctly Dan, I understand what you are saying. I don't mean if I own my 2nd home and rent it to others, I meant if I own a home that someone else exclusively uses as their second - because I gifted it to them or because they pay for the stay. Especially if 'I' = 'entity'.

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#2114609 - 01/18/17 07:26 PM Re: HMDA Home Purchase HMDA CRA Gal
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
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Bloomington, IN
Not sure if I entirely understand what you are trying to get at but:

I meant if I own a home that someone else exclusively uses as their second

This implies to me you are renting a home to someone that uses it as a second residence. IMO this does not make that home a transitory residence.

I will refer you back up to Kathleen's comments because how the home is being occupied by you and/or rented has a huge bearing on how the home is treated and Kathleen outlined it very well.
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The opinions expressed are mine and they are not to be taken as legal advice.

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