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#2256179 - 06/30/21 06:40 PM Definition of Temporary Financing
ACBbank Offline
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I believe that I know the answer to this but I wanted to confirm that the definition of temporary financing includes bridge loans (Loans that come off of our books and are not refinanced as a perm loan) as it relates to determining HMDA status?
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#2256186 - 06/30/21 08:31 PM Re: Definition of Temporary Financing ACBbank
Dan Persfull Offline
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See the OSI to 1003.3(3).

Bridge loans are no longer exempt strictly based on being a bridge loan. They have to meet the temporary financing definition.
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#2256189 - 06/30/21 09:46 PM Re: Definition of Temporary Financing ACBbank
ACBbank Offline
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Dan - thanks for the note to look at 1003.3(3). In looking it over is it correct to state that bridge loans now need to be reviewed to examine whether the specifics of each loan meet the exception criteria?

Would it also be correct to state that a construction only loan or LOC is considered temporary financing if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale? Or would these types of financing also need to be examined individually to determine if they meet the exemption criteria?

Thanks.
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#2256209 - 07/01/21 01:56 PM Re: Definition of Temporary Financing ACBbank
raitchjay Offline
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OK
Not Dan, but spec home construction is still expressly exempt.
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#2256213 - 07/01/21 02:39 PM Re: Definition of Temporary Financing ACBbank
Adam Witmer Offline
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Great discussion and also not Dan, but bridge loans need reviewed on a case-by-case basis to ensure they are designed to be replaced by a new loan. Every bridge loan example in the updated version of HMDA talked about the loan having plans to be replaced by a new loan.
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