We have a loan in a business name on which the primary purpose was to purchase multiple guest houses. The majority of the proceeds went for that purpose. However, the owner of this business also had a loan with us secured by a primary residence with a very small balance. Part of the funds were used to pay that loan off and then that property was used as collateral as well. So basically loan is secured by 4 residences - 3 of which are to be used as guest houses. My thinking is that if it were only to purchase the guest houses, it would not be reportable. My question is since part of funds were used to refinance a residence, is it reportable? And if so, is it reported as a purchase or a refinance since the refinance is what would make it reportable. This sounds really confusing - hope it makes sense.

I am confused. Why would a loan to purchase 3 residences not be reportable under HMDA?

These are guest houses which are considered transitory. No one is living in them on a full time basis
. They are just rented out like Air BNB. I thought that property that was transitory was not reportable. Hopefully I am not misunderstanding that.

True, if that is the case I agree. But you still have the refinance of the primary residence to address. I am not sure you can ignore that, but I am not really a HMDA expert.

Agree with Randy....regardless of any transitory housing question, the reportable refinance aspect makes the loan reportable. Not terribly familiar with AirBNB stuff, but if you determine that the guest homes being purchased are transitory, then yes, you'd default back to a "refinance" purpose.

I too agree with Randy that you can't ignore the dwelling that is being refinanced. I understand it gets confusing with the guest houses, so let's take them out of the scenario and replace them with, say, trucks. Would a small refi plus the purchase of 3 trucks still be HMDA reportable? Yes because you meet the definition of a refinance.

The bottom line is that this scenario (assuming transitional housing) appears to meet the definition of a refi.

Agree with the above. We have talked on the AirBnB issue in other threads in more detail, my understanding is the main consideration there is how long hey are rented out. So, if rented for days, weeks, a month, then it is transitory. If rented for longer periods, such as a year, then it would be a dwelling.

Thanks for the answer. As far as number of dwellings I assume I would put 1 since I am not considering the others as residences?

Correct. Total Units would be "1," assuming the primary residence is not a duplex, triplex, or quadraplex..