Thread Options
#2200002 - 12/06/18 06:14 PM Total Units
Jay Offline
New Poster
Joined: Oct 2017
Posts: 10
I am reviewing a loan where the borrower is improving an 11-unit apartment building. They’re renovating a storage area and making 2 additional apartments. Should 11 units be reported, since that is the current number of units? Or, should 13 units be reported, because that is the total number after the renovations are made? (Can we prove that they actually used the loan proceeds to add 2 additional units?).

Return to Top
HMDA

   
HMDA Academy
#2200014 - 12/06/18 06:59 PM Re: Total Units Jay
Carolina Blue Offline
Platinum Poster
Carolina Blue
Joined: Jul 2005
Posts: 951
Lost in a regulatory fog
HMDA is an application regulation and is about the intention of the application, so you will report 13. Not sure I follow your parenthetical question, but you need to have something in file to support why you are reporting 13 units (construction plans, appraisal, borrower statement, etc.)

Return to Top
#2200019 - 12/06/18 07:13 PM Re: Total Units Jay
CRL Offline
Platinum Poster
CRL
Joined: Sep 2003
Posts: 554
Question for a different scenario for reporting number of units:
Subject property is legally (permitted) a 6 unit apartment building, but they have an additional unit rented. We underwrite based on the income from only the 6 legal units. I am assuming we report 6 units for HMDA, despite there actually being a 7th unit rented out?

Return to Top
#2200061 - 12/06/18 09:48 PM Re: Total Units Jay
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 46,344
Bloomington, IN
Is the loan secured by 6 or 7 units? If secured by 7 you report 7.

(31) The number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#2200113 - 12/07/18 04:54 PM Re: Total Units Jay
CRL Offline
Platinum Poster
CRL
Joined: Sep 2003
Posts: 554
Yes, loan is secured by entire building and we have copies of rental agreements for 7 units, we just don't use the income from the un-authorized/illegal unit. Well, this adds a new twist for my 2018 reporting that I hadn't thought about before! Not that it happens frequently, but I'm sure I have at least a few I need to go verify what number of units we're reporting. Thanks Dan!

Return to Top
#2200137 - 12/07/18 07:22 PM Re: Total Units Jay
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,643
The Swamp
What is it that makes it illegal? Inquiring minds want to know.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

Return to Top
#2200195 - 12/08/18 01:43 AM Re: Total Units Jay
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,226
Cape Cod
Often it involves the capacity of an on-site septic system or even a zoning bylaw.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2202107 - 01/04/19 07:07 PM Re: Total Units John Burnett
CRL Offline
Platinum Poster
CRL
Joined: Sep 2003
Posts: 554
Yes, John is correct, it's permitted for 6 units max.

Return to Top
#2230375 - 02/06/20 02:43 PM Re: Total Units Jay
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,476
I'm interested in the expansion initial question. I am guessing this is just an intent of the Regulation analysis? There is no Regulatory reference for what to do when a multifamily property is expanded, as far as reporting Total Units, correct?

Return to Top
#2230382 - 02/06/20 03:20 PM Re: Total Units Jay
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 76,717
Galveston, TX
You report the known number of units based on the information that you have. What local zoning laws allow, I don't think is a consideration for HMDA. But if they are violating the law and the city closes them down, then you have a credit risk if your repayment is based on rents.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top
#2232229 - 03/03/20 08:31 PM Re: Total Units Jay
Beachbum Offline
Junior Member
Joined: Jul 2018
Posts: 39
We have a Commercial loan secured with one manufactured home park with 17 pads and 1-4 single family residence in two different counties. How would we report the number of units in HMDA and what address?

Return to Top
#2232325 - 03/04/20 06:40 PM Re: Total Units Jay
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,759
Central City, NE
If I understand correctly, you have 17 pads (that 17 for total units) and one, one unit dwelling (that's 1), for a total of 18.

For the address, pick one.
If there are multiple properties taken or proposed to be taken as security …a financial institution reports… a single entry on its loan/application register and provides the information for one of the properties taken as security that contains a dwelling. [Commentary to §1003.4(a)(9) #2 and #3]:
_________________________
David Dickinson
http://www.bankerscompliance.com

Return to Top