If a builder loan that was solely for construction of a dwelling is being refinanced with a new promissory note with new terms now that the dwelling is complete (the old construction note is being replaced) and new documents, does that constitute a refinance under the HMDA definition? Will it be reportable?

Yes. Assuming the builder loan was secured by the dwelling.

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.

I agree with IR with the additional assumption the new loan is being structured to be paid off when the home sells. The new loan is no longer a construction only loan.

Thank you.

I believe this would be reported as a purchase, not a refinance:

3. Construction and permanent financing. A home purchase loan includes both a combined construction/permanent loan or line of credit, and the separate permanent financing that replaces a construction-only loan or line of credit for the same borrower at a later time.

Good point hmdagal and I agree.

From the FAQ for additional support.

2. My financial institution originated a construction only loan to a builder exclusively to construct a dwelling for sale. My financial institution determined this loan was not HMDA reportable, as it was considered temporary financing under comment 3(c)(3)-2. After origination of the loan and construction of the house, the builder has not been able to find a buyer for the home, and would like to replace the first loan with a permanent loan and rent out the house. Is either the first or the second loan HMDA reportable?

In regard to the first loan, the fact that the house was not sold after construction, and permanent financing was unexpectedly obtained, does not render the construction-only loan reportable. However, the financial institution must report the second loan as a home purchase loan because it is permanent financing that replaces a construction-only loan under comment 2(j)-3.

Updated Nov. 14, 2018