We are reporting a multi-family loan that meets the community development purpose. To document the file that the majority of the tenants are LMI, the customer is going to provide us with the rent roll with the tenants monthly salary. Can we accept this? Isn't this a violation of privacy? What else can the customer provide us that will not violate any privacy laws. We don't want to get ourselves or the customer in trouble for providing us with confidential information.

Is a statement from customer noting the % of LMI tenants sufficient?

Thank You.

Can they leave off the private information? You don't need to know who the tenants are, or which apartment they live in. Just get a list of income of the tenants and add an explanation that the owner obtains this information from all tenants.

Rather than tenant income could you use the proxy of rent rate vs. fair market rent (FMR) rate?

That's what I was thinking Tennismom. Use the average unit rent and if it's 30% or less of the monthly median family income, you can consider it affordable housing. At least that's how we have been able to get consideration for loans that are not subsidized or income restricted rent.

We do document the rent rate vs. FMR but our examiners want to know how many of the tenants are LMI. They have stated that just because the rents are below FMR does not mean that the tenant is an LMI individual. So our officers were calling the customers to get a percent of tenants that are LMI and noting it in the file but we were not sure whether this would be sufficient. Some customers have the tenants income they can provide us - we will let customer know to leave the confidential information out.

Thank you all.

That is very true. Low rent to middle or upper income tenants is not CD eligible!

Is the need to document tenant income a new requirement, or is subjectivity on the part of individual examiners? I have always used the FMR information to document affordable housing, and it has been enough to document CDL eligibility.

As with much of CRA, it depends upon the exam team. Some are willing to take the rent and the location as sufficient evidence, but that essentially is a rather "rude" value judgement that says "no one who makes more money would be willing to live there."