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#2104125 - 10/21/16 06:37 PM Draw down line of credit for a flip house..
Winning Offline
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Joined: Sep 2015
Posts: 88
Draw down line of credit for a flip house..would this be reported? I am questioning because its the purchase, improve, and sale. However, its set up like a construction loan by being a draw down loc...

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#2104127 - 10/21/16 06:45 PM Re: Draw down line of credit for a flip house.. Winning
TMatt87 Offline
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TMatt87
Joined: May 2011
Posts: 1,910
Idaho
These are still closed end loans, so they aren't optional reporting. They don't qualify for the temporary financing exemption because repayment will be from the sale of the property. We report these.
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#2104128 - 10/21/16 06:48 PM Re: Draw down line of credit for a flip house.. Winning
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,455
Bloomington, IN
Draw down line of credit for a flip house..would this be reported?

I am assuming this is loan to purchase, renovate and sell the "flip-house". If that assumption is correct you have a splash and dash loan which would be reportable as a purchase.

http://www.ffiec.gov/hmda/faqreg.htm
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#2104235 - 10/24/16 03:25 PM Re: Draw down line of credit for a flip house.. Winning
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
First, I agree.
Second, I encourage you not to use the word "line of credit" when discussing a closed-end loan. In HMDA and other regulations, there's big differences between Lines (open-end, revolving) and Loans (closed-end, either multiple advance or single advance). When you use the term "line of credit" but you're referring to a closed-end loan, it often causes confusion.
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David Dickinson
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#2199997 - 12/06/18 05:41 PM Re: Draw down line of credit for a flip house.. Winning
clinds Offline
Member
Joined: Sep 2017
Posts: 64
Reviving a thread, I have the same question; however, the only difference is the draw down (closed-end loan) is to improve the home and then sell it. Customer paid cash and then is going to get a draw down (closed-end loan) to fix the house and sell it. I believe this is reportable as a home improvement instead of a purchase as the previous scenario. Correct?

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#2199998 - 12/06/18 05:43 PM Re: Draw down line of credit for a flip house.. Winning
burke116 Offline
Platinum Poster
Joined: Jun 2014
Posts: 530
RVA
Correct.

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