We have a loan request where the applicant wants to buy 3 acres adjacent to their homestead. They also want to roll their current mortgage in with this loan so they can have just one loan payment. Both the homestead property and the 3 acres being purchased will be the collateral. Would I be able to do this loan as a normal transaction since the 3 acres being purchased will become a part of their homestead, or do I need to do this transaction as a Home Equity and remove the 3 acres being purchased as part of the collateral?

You should be able to do this as a purchase transaction. I would suggest visiting with your title company. This is call "lien spreading" and used to not be allowed, but some court decisions ruled awhile ago that this would not require it to be classified as a 50(a)(6) loan anymore.

Thank you Randy, that's the answer I was hoping for