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#2195046 - 10/09/18 08:52 PM HMDA Multifamily Property or Not
DixieLee Offline
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For Multifamily, we have always gone by how many units are under one roof, for instance if a loan is secured by 8 4-plexes (32 units) we would not consider that multifamily b/c there are not 5 or more units under one roof. However, as I’m reading through some conversations on BOL, it appears it is interpreted differently by some. Several of the comments on BOL state the units don’t have to be attached, just on the same parcel of land or deed of trust.

I have seen several different opinions on this question on BOL and I can't seem to come to a straight answer. In fact, I have seen contradicting responses from a BOL employee in 2016, which differs from her own opinion in 2010. On 12/18/2016 she stated a multifamily community can be made up of separate buildings that together make up the community. That same responder said on 11/08/2010 that multifamily means more than four units in a single building.

We have a 52-aparment consisting of 13 4-plexs. None are income restricted units, but we still need to know whether to report "NA" for no multifamily units or "0" for multifamily unit with no income restricted units. Please help clarify.
Last edited by DixieLee; 10/09/18 09:09 PM.
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#2195066 - 10/10/18 12:13 PM Re: HMDA Multifamily Property or Not DixieLee
RVFlyboy Offline
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Your interpretation of "under one roof" is incorrect as far as HMDA is concerned. The regulations and commentary are very specific that your 52-unit apartment complex consisting of 13 4-plexes is a multi-family dwelling. See 1003.2(f) and Comment 2 to that section and also 1003.2(n) and comments.
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#2195070 - 10/10/18 12:50 PM Re: HMDA Multifamily Property or Not DixieLee
Adam Witmer Offline
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I agree with Jim that the current rules clearly call your example a "housing complex" which is included in the definition of a multi-family dwelling.

This is actually a quite complex topic, so let me try to give you a background on this. The reason you were probably seeing discrepancies is that many of us had a different understanding under the old rules. Under the old rules (pre-2018), the rules weren't very clear about housing complexes that had multiple structures on one parcel. Therefore, many of us stated that you would only have a multi-family dwelling if you had 5 or more units under one roof.

When the first version of the new rules came out in 2015, however, the guidance clarified some things and changed our understanding. (This would explain why you saw a differing opinion in 2010 and 2016, because the first version of the new rules were released in 2015.) In fact, the 2017 final rule (the second version of the new rules) goes into a pretty big discussion in the preamble talking about whether they should include loans that are secured by multiple structures that add up to more than 5 units in more than one location (e.g. 6 separate houses throughout a county in rural areas). The 2017 final rule clarified that multiple structures located throughout multiple locations is NOT a multifamily dwelling. The 2017 final rule also clarified that a loan that is secured by part of, but not all, of a housing complex is also NOT a multi-family dwelling.

What didn't change in 2017 was the fact that a housing complex is considered a multi-family dwelling. The 2017 final rule changed the term "complex" (referenced in the 2015 final rule) to "housing complex" without changing the meaning of the term.

The 2015 rule clearly explains that a "complex" may have multiple properties on one parcel:
"In addition, defining what constitutes multiple properties may present challenges for some multifamily complexes, which may sit on one parcel but have multiple addresses."

Based on the background I just provided, your example of 13 4-plexes on one parcel would be considered a "housing complex" which is clearly included in the definition of a multi-family property under the new rules.

For a citation on this, we can look at Comment 2 from 1003.2(f) that Jim provided:
"2. Multifamily residential structures and communities. A dwelling also includes a multifamily residential structure or community such as an apartment, condominium, cooperative building or housing complex, or a manufactured home community."
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#2195075 - 10/10/18 01:22 PM Re: HMDA Multifamily Property or Not RVFlyboy
DixieLee Offline
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Thank you so much for your response!

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#2195152 - 10/10/18 08:03 PM Re: HMDA Multifamily Property or Not Adam Witmer
swiggles Offline
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Where is "housing complex" defined in the Entity Guide, FIG or the Reg and its commentary? I don't see it. Are you assuming it can mean, for example, several quads on a single parcel of land by reading in the commentary what does NOT constitute a multifamily dwelling?....which is a few units out of a multi-family building or several quads spread out around town?
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#2195179 - 10/11/18 12:31 PM Re: HMDA Multifamily Property or Not DixieLee
Adam Witmer Offline
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swiggles, they really didn't do a good job of explaining this in the final rules and you won't find a definition of either "complexes" (2015 final rule) or "housing complexes" (which replaced "complexes in the 2017 final rule).

To understand this, we really have to look at the explanations found in four different issuances: the 2014 proposal, the 2015 final rule, the 2017 proposal and the 2017 final rule. The preamble to the 2014 proposal started this change:

"The proposal also revises comment Dwelling-1 to list condominium and cooperative buildings as additional examples of multifamily residential structures, and to provide that both multifamily complexes and individual buildings are covered."

(Note: The only change made in the 2015 final rule, the 2017 proposal, and the 2017 final rule relating to this was a change in the term from "complexes" to "housing complexes" - though they were clear in the preamble to both the 2017 proposal and 2017 final rule that this change did not affect the meaning of the term.)

Based on the fact that they listed "both" in the 2014 proposal, it would seem logical that "multifamily complexes" are different than "individual buildings." Therefore, if it is not an "individual building," then wouldn't "multifamily complexes" have to be comprised of multiple buildings?

Now, we can go back to current Comment 2 from 1003.2(f) to further reinforce this:
"2. Multifamily residential structures and communities. A dwelling also includes a multifamily residential structure or community such as an apartment, condominium, cooperative building or housing complex, or a manufactured home community."

In layman's terms, this comment basically explains that you can have either 1) a "multifamily residential structure" (i.e. individual building) or 2) a "community such as a...housing complex" (i.e. multiple buildings).

Again, the rule could have been much more clear as it is ridiculous (and sort of humorous in a geeky compliance way) that I have to break this down into the preamble to the original proposal to (try to) understand what the rule is requiring.
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#2195402 - 10/15/18 02:06 PM Re: HMDA Multifamily Property or Not Adam Witmer
swiggles Offline
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I loathe trying to explain that to an examiner who has a different interpretation.
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#2204439 - 01/30/19 04:25 PM Re: HMDA Multifamily Property or Not swiggles
Carolina Blue Offline
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So Adam (or anyone else) would you say that one parcel containing a duplex and 4 manufactured homes is a "housing complex" and therefore multi-family?

If there were 5 manufactured homes instead, then would it automatically be a manufactured home community and therefore multi-family even if the homes are permanently attached and there are no pads?

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#2204704 - 02/01/19 02:01 PM Re: HMDA Multifamily Property or Not Carolina Blue
Adam Witmer Offline
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Originally Posted By Carolina Blue
So Adam (or anyone else) would you say that one parcel containing a duplex and 4 manufactured homes is a "housing complex" and therefore multi-family?

I would. While the rule doesn't come out and specifically say it any more than I already explained, the final rule does say this:

After careful consideration of all the comments received, the Bureau now believes that it is not appropriate to add language to comment 2(f)-2 providing that a loan secured by five or more separate dwellings in more than one location is a loan secured by a multifamily dwelling.

In other words, the CFPB appears to say that five or more separate buildings on one location would be considered multi-family while five or more separate buildings in multiple locations would not.

Originally Posted By Carolina Blue
If there were 5 manufactured homes instead, then would it automatically be a manufactured home community and therefore multi-family even if the homes are permanently attached and there are no pads?

I would say it is multi-family because it has more than 4 structures. Whether it is a manufactured home community is probably up for debate, though I would look to see if it has the features of a "community" as referenced in this thread: https://www.bankersonline.com/forum/ubbt...pads-reportable
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#2204781 - 02/01/19 06:17 PM Re: HMDA Multifamily Property or Not Adam Witmer
Carolina Blue Offline
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Thanks Adam! You've been great helping us all navigate these unchartered waters.

I read that excerpt in the final rule and right now, I'm making assumption one location = same parcel. I've sent me email to CFPB to make sure this assumption is right because we have several situations where there are single family or manf. homes on separate but adjoining parcels that are more or less operate as "complexes" by the owner. I'll let you know what type of response I get.

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#2204784 - 02/01/19 06:20 PM Re: HMDA Multifamily Property or Not DixieLee
Adam Witmer Offline
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Perfect. It is always good to hear what the CFPB is telling others, so I will await your reply.

They really could have done a better job making things clear on this topic...
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#2204854 - 02/01/19 10:08 PM Re: HMDA Multifamily Property or Not Adam Witmer
Carolina Blue Offline
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I just got the call back and they could not give me answer. They (yes, I got two CFPB employees on the call) just kept referring to the commentary that the dwellings can have separate addresses. After about 10 minutes I finally pinned them down and they agreed that it is safe to assume anything on one parcel is the same location. As soon as they agreed they then gave the caveat that each situation has to be taken on a case-by-case basis and I can't automatically rule out dwellings on separate parcels when considering multi-family. Of course they could not point me to a definition of "housing complex", but they did thank me for pointing out an area of concern. crazy crazy

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#2204894 - 02/04/19 12:50 PM Re: HMDA Multifamily Property or Not Carolina Blue
Adam Witmer Offline
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Originally Posted By Carolina Blue
they agreed that it is safe to assume anything on one parcel is the same location.

Well, it seems they agree with your situation then since you said all structures are on the same parcel.

Originally Posted By Carolina Blue
I can't automatically rule out dwellings on separate parcels when considering multi-family.

I can see their point with this statement as having two or three parcels side-by-side could be completely different than 5 locations spread throughout town.

Originally Posted By Carolina Blue
Of course they could not point me to a definition of "housing complex", but they did thank me for pointing out an area of concern. crazy crazy

This is definitely an area that could use clarification.
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#2204918 - 02/04/19 03:06 PM Re: HMDA Multifamily Property or Not DixieLee
RR Joker Offline
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I can see their point with this statement as having two or three parcels side-by-side could be completely different than 5 locations spread throughout town.

I, personally, refuse to consider this. If I have 3 Quads on 3 separate tracts, I have 12 units that are not MF properties. They defined parcels enough for me to draw that conclusion and stick with it regardless.
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#2204923 - 02/04/19 03:29 PM Re: HMDA Multifamily Property or Not RR Joker
Adam Witmer Offline
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Originally Posted By RR Joker
I, personally, refuse to consider this. If I have 3 Quads on 3 separate tracts, I have 12 units that are not MF properties. They defined parcels enough for me to draw that conclusion and stick with it regardless.

To clarify, I think this (only considering multiple structures on a single parcel to be a housing complex) is the best approach, and is the strongest argument based on the citations I previously provided in this thread. My point is that I could NEVER see the possibility of locations spread out around town as being a housing complex (as the preamble to the 2017 final rule makes this clear). That said, since a "housing complex" isn't clearly defined, I can see how a rare situation where multiple Quads on different parcels might be considered by some as a housing complex. Again, I think the best approach is to use the parcel hard line approach as their is no need to muddy the waters in this already unclear area, but I can imagine some (rare) scenarios where the units may have shared utilities/services/maintenance that would make it appear to be a housing complex, but for whatever reason, are actually on different parcels.

The bottom line is that a hard line "per parcel" approach will keep things consistent and be easier to defend as an overall position.
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#2204924 - 02/04/19 03:39 PM Re: HMDA Multifamily Property or Not RR Joker
Carolina Blue Offline
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Thanks again Adam and Joker. Yes, that's the stance were taking. The only really gray area I've encountered so far is one borrower who has 6 parcels all adjacent (used to be one property which he parceled off) with a manufactured home permanently attached on each parcel. There is a shared road, central mailboxes location, and he calls it a mobile home park, but should we consider it a park and report as multi-family? I would not report as multi-family if they were stick built.

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#2204927 - 02/04/19 03:45 PM Re: HMDA Multifamily Property or Not DixieLee
RR Joker Offline
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I would look at that just like you suggest if they were stick built homes all in a row on separate parcels in a subdivision. Single-family housing.
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#2204933 - 02/04/19 03:54 PM Re: HMDA Multifamily Property or Not DixieLee
Adam Witmer Offline
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That's exactly the scenario I was talking about, Carolina - the shared road, central mailbox, etc. To me, this "looks" more like a "community" than stick-built quads all in a row on separate parcels in a subdivision. That said, I still think the better option is to stay with the hard line parcel test and not call it a housing community nor multifamily because of the separate parcels. To me, that approach is just cleaner, easier to support, and easier to be consistent.
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