Can a small creditor make a 12 mo. interest only dwelling secured loan (non owner occupied) to a consumer?

The property is being listed for sale and will pay off the loan at the time of sale. The proceeds are for debt consolidation to
payoff credit cards used to pay some of the costs of building the dwelling. We are a small creditor that typically only originates
QMs. As a balloon payment would be due at maturity, would the balloon payment be factored into the DTI?

Sounds like a temporary loan to me. See .43(a)(3)(ii).

Thank you.

Just one more question about this temporary loan. Would this be a reportable loan for HMDA?

Reportable as an "Other" for consumer loans?

This loan would not meet HMDA's definition for temporary financing.

Thanks, Dan.

Thought so!

Since the intent of the borrower and the bank is that the loan will not be converted into permanent financing, it isn't "temporary" under HMDA's requirements. so it gets reported.

Thanks, John.

Hi All;

I am new to BOL and posted my first question yesterday. I had no responses. Am I doing something wrong? Trying to figure out how this works.

Thanks for any assistance!

Hi again;

Disregard the above post from bean2, I did get a response! Thank you.