Customer has business LOC for the purpose of purchasing dwellings. He finds a dwelling and then makes a draw against the line (against the Agreement, no individual loans). The line will mature soon and he wants to refinance/renew the line. Loan proceeds will pay the balance on the old line and he will still have plenty of money to continuing purchasing dwellings. Is the new line a refinance or a purchase loan for HMDA?

If the new line is paying off the balance of the old line, but not satisfying/replacing the old line, the new line is not a refinancing. It's also not a purchase since the proceeds of this loan were not used to purchase a dwelling.

If the new line satisfies/replaces the old line, it is a refinance.

And as long as both are secured by dwellings (I don't think the OP specified).

Good point.

Yes both the new and old are secured by dwellings. The old line (which has reached maturity) is being paid off. The new line pays off the old line and the remaining cr limit on the new line will be used to purchase more rental properties.

Here is a twist... The Revolving line of credit is used to acquire homes and do improvements. However, when the house is ready for occupancy a new loan is done to pay down the line and put that house on an amortization. Once again, it does not payoff the RLOC, it is only a principal payment and the funds are made available to the borrower again and the house is in a separate loan on an amortization. Is the new amortizing loan reportable?

It is not a refinance as the existing loan is not replaced.

Refinancing means a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower.

Doesn't sound reportable to me.

Wait. How is the original post not a Purchase. It's a line credit to purchase dwellings. Just because it also pays off (or refinances) a previous line shouldn't change that, should it?

"Loan proceeds will pay the balance on the old line and he will still have plenty of money to continuing purchasing dwellings.

Now that we have more info, I agree with you Inherent_Risk. Purchase trumps Refinance in the waterfall of mixed purpose loans. That isn't what we understood from the original post.

However, in both of these scenarios the lines would not be reported if they are revolving line of credits and the lender is not reporting required to report open end loans, even though they are being used to acquire homes. Correct? Would anything change if you considered the revolving line of credit used to purchase them as "temporary financing"?

If the lender does not report open-end lines, then you are correct that they would not be reported.



If the lender does not reported open-end lines, then the line would not be reported. I'm not sure I fully understand this question, so if this doesn't answer it, you could provide clarifying information.

I agree with Adam. If you don't meet the 500 threshold for open-end lines, then no open-end credit is ever reported.

ckme: I want to make sure we are talking about revolving (open-end) credit. That's what we mean by a line. It's not a multiple advance, closed-end loan(like a construction / draw loan that is non-revolving).

Jumping in on this discussion....RLOC to an investor in real estate, secured by 1-4 family property. Investor gets a working capital line of credit with us for future investments. The investments will be to purchase real estate periodically (not immediately). HMDA reportable assuming we are over the 500 threshold?

Yes. Since the LOC is secured by a dwelling(s) and for the purpose of purchasing dwellings, it's reportable.

Thank you Dave! Looks like we just jumped into having to report open end LOC's for 2019 in 2020

Looks like we just jumped into having to report open end LOC's for 2019 in 2020
Congratulations!

What if a line of credit is set up for a business to purchase dwellings in the future but is not secured by a dwelling when the line is set up? Not reportable or report with no address information?

If it's a business-purpose loan not secured by a dwelling, full stop. Not HMDA reportable. It fails to meet the definition of covered loan.