Great scenario complinewbie. I think the first question you need to ask is whether the commercial retirement home is considered a dwelling under the definition of a dwelling (and the commentary you mentioned). If this structure is determined to be a dwelling, then there is not doubt that this is reportable.
If it is not considered to be a dwelling, then the answer is debatable. We have had a few pretty in-depth discussions on these threads about this, but long story short is there are two camps as to how to report a dwelling that is inteneded to be converted into a nondwelling structure:
Camp 1 takes a forward looking approach to how the property will be used, and therefore, would not report the loan citing the finished structure as a non-dwelling.
Camp 2 takes a snapshot approach and views the property the way it is today, meaning that they would report it as a dwelling based on the home at the time of the sale. (There could be a few variables too, such as if the funds were not going to be used for the conversion vs using the funds to convert it to a retirement home.)
Personally, I am generally in Camp 1 as the purpose of HMDA is to report how a lender helps meet the "housing needs" of the community. That said, the CFPB has verbally told bankers (including myself) that the snapshot approach is the way to go, though they always give their disclaimer that this is only an opinion and not an official interpretation of the CFPB.
So to recap: You first need to decide if the commercial retirement home will be considered a dwelling. If so, it is absolutely reportable. If not, you need to decide what camp you are in and be consistent with how you report these types of loans.
_________________________
Adam Witmer, CRCM
All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com