I am still getting confused on the following situation:
Customer is going to refinance his mortgage, remodel his home (12 mth loan) and when completed will obtain permanent financing.

I'm thinking this should be not HMDA as it will be paid off w/perm financing, however, I do not see this scenario in the Reg, regarding temporary financing.

Please help.
Thanks!

While the examples in 1003.3(c)(3) mostly relate to new builds/construction loans, your example appears to be designed to be replaced by separate permanent financing extended by any financial institution to the same borrower at a later time.

I would say this is considered temporary financing due to a 12 month loan.

The 12 month term is not a determining factor for temporary financing. The determining factor is if the loan will be replaced by permanent financing.

A 6 month construction loan that will be paid off at completion by the sale of other property or in cash is not temporary financing and would be a reportable loan.

I want to reinforce what Dan is saying. The term of the loan has very little to do with the loan being considered temporary or not. For instance, a term of 1, 3, 6, 12 or 18 months doesn't make the loan temporary. The "short-term" loan must be followed by another "long-term" loan for the first (short) loan to be temporary.

I say "very little" because a 5 year loan replaced by a 5 year loan is not temporary.