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#2282743 - 03/27/23 10:19 PM Loan Purpose - funds to improve another dwelling
Help! Compliance Offline
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Joined: Oct 2012
Posts: 140
San Antonio, TX
When looking at HMDA Getting It Right, the definition of Home Improvement Loan doesn't specify the improvements have to be for the dwelling securing the loan to report the Loan Purpose as 2-Home Improvement. Although, their examples do specify funds were to improve the property securing the loan. That being said, if cash is taken out of a home's equity that is owned free and clear to improve another home that is not securing the loan (investment property), shouldn't Loan Purpose be reported as 2-Home Improvement regardless?

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#2282750 - 03/28/23 01:32 PM Re: Loan Purpose - funds to improve another dwelling Help! Compliance
raitchjay Offline
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You are correct, it should be reported as home improvement.
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#2282752 - 03/28/23 01:55 PM Re: Loan Purpose - funds to improve another dwelling Help! Compliance
Inherent_Risk Offline
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Joined: Jan 2017
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What about the real property the dwelling is on (i.e. landscaping of a different property with a dwelling on it)? I know I have heard that is limited to THE dwelling securing the property, but can't find anything. I might have made it up.

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#2282755 - 03/28/23 03:01 PM Re: Loan Purpose - funds to improve another dwelling Help! Compliance
raitchjay Offline
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My computer (and BOL) are being really slow right now, so i'll look for the citation and try to post it, but i don't know of any caveat like that IR.
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#2282756 - 03/28/23 03:10 PM Re: Loan Purpose - funds to improve another dwelling Help! Compliance
raitchjay Offline
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(i) Home improvement 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 repairing, rehabilitating, remodeling, or improving a dwelling or the real property on which the dwelling is located.

"The dwelling" in that sentence doesn't seem to exclude non-collateral dwellings to me.
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#2282757 - 03/28/23 04:02 PM Re: Loan Purpose - funds to improve another dwelling Help! Compliance
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 47,482
Bloomington, IN
The property being purchased, refinanced or improved does not have to be the property securing the loan to qualify as a covered loan.

You report the address for the property securing the loan, or proposed to secure the loan on the LAR. See PDF page 60 in the 2022 GIR.
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