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#2229502 - 01/23/20 06:17 PM Purpose is down payment funds
laf0915 Offline
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Joined: May 2006
Posts: 232
Application for down payment funds on existing home to use to purchase a different home. This is not a refinance. Would this be reported as a purchase even though it is only down payment funds, or would it be reported as Other purpose?

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#2229520 - 01/23/20 07:13 PM Re: Purpose is down payment funds laf0915
Carolina Blue Offline
Platinum Poster
Carolina Blue
Joined: Jul 2005
Posts: 952
Lost in a regulatory fog
It will be a purchase. Look at the definition of home purchase in the reg.
(j) Home purchase loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of purchasing a dwelling.

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#2229521 - 01/23/20 07:13 PM Re: Purpose is down payment funds laf0915
raitchjay Offline
Power Poster
Joined: Oct 2009
Posts: 8,668
OK
(j) Home purchase loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of purchasing a dwelling.

"in whole or in PART". Report as a purchase.
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I'm fixin' to fix that.

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#2229531 - 01/23/20 07:30 PM Re: Purpose is down payment funds laf0915
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
And here's a specific commentary addressing your situation:

If an institution making a first mortgage loan to a home purchaser also makes a second mortgage loan or line of credit to the same purchaser to finance part or all of the home purchaser’s downpayment, both the first mortgage loan and the second mortgage loan or line of credit are home purchase loans. [Commentary to §1003.2(j) #4]
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David Dickinson
http://www.bankerscompliance.com

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#2229541 - 01/23/20 08:02 PM Re: Purpose is down payment funds laf0915
laf0915 Offline
100 Club
Joined: May 2006
Posts: 232
Thank you for the quick responses.

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