I have a 6 month term loan to a Living Trust borrower to 'finish construction' of 3 duplexes including the infrastructure (road, gates, landscaping, etc). Most of the construction on all three duplexes themselves are complete and costs have been paid in cash by the Trust. The three rental duplexes will be refinanced by us into three separate permanent financing loans at the maturity of the short-term loan.
1. Is this short-term loan considered temporary financing and is excluded from HMDA reporting?
2. Will the three separate permanent financing loans be refinances or purchases?

Thank you.

1. Temporary financing, not reportable.

2. As purchases (taking you at face value that some of the actual construction...besides just the infrastructure work....is being completed with your temporary loan).

1. See 1003.3(c)(3) Paragraph 3(c)(3) 1. Temporary financing.

2. See 1003.2(j) Official Interpretation 2(j) Home Purchase Loan - Comment #3.

Yes, that is correct. They are finishing the drywall, painting, cabinet installs, etc. with our short-term loan.

Thank you!

Thanks Dan.