Our bank issues term notes under a guidance line of credit for a commercial client to purchase homes, renovate and sell. Are these term notes, 12 months with interest only, reportable for HMDA? If so, what income figure should be reported? The borrower is an individual and the LO only used an income calculation for the approval of the guidance line. The term notes only consider the LTV of the property being purchased in the approval documents.

I would equate it to this:

Official Interpretation

Paragraph 3(c)(3)
2. Loan or line of credit to construct a dwelling for sale. A construction-only loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale. See comment 3(c)(3)-1.ii through .iv for examples of the reporting requirement for construction loans that are not extended to a person exclusively to construct a dwelling for sale.

Your response covers the construction of a new dwelling, but what if they are buying an existing dwelling, rehabing it and then selling?
We have a lot of "flippers" that don't tear down the home and construction new ones but instead simply rehab and renovate.
Would that make this short term note reportable since it is not intended to to be replaced by a permanent long term note to this borrower?