Is this scenario considered a Refinance or a Purchase for TRID (& HMDA)?

Borrower has a manufactured home that he is still paying off a loan on. The park where he has the home is selling him the land. The MH will be titled with the land and will become real property in the property records. We are requiring that to take place as part of our loan - so we will have a trust deed covering the combined coach/land. Our loan will pay off the coach only loan, too.

Since the land is being purchased, do we show this as a Purchase for TRID & HMDA? Or because we are paying off the coach only loan, does it become a Refinance?

Thank you!

3. Purpose—multiple-purpose loan. Section 1003.4(a)(3) requires a financial institution to report the purpose of a covered loan or application. If a covered loan is a home purchase loan as well as a home improvement loan, a refinancing, or a cash-out refinancing, an institution complies with § 1003.4(a)(3) by reporting the loan as a home purchase loan.

TRID - since the loan is for the purchase of the land and the land will secure the loan it will be a purchase.

HMDA - it will be a refinance for HMDA since the dwelling is being refinanced and not purchased.

Thank you!

So which is it under HMDA, Dan and Randy? Purchase or refinance?

Well, it seems the jury is out.

I thought this was a pretty straight forward answer.

TRID - since the loan is for the purchase of the land and the land will secure the loan it will be a purchase.

HMDA - it will be a refinance for HMDA since the dwelling is being refinanced and not purchased.

It cannot be a purchase for HMDA because there is no dwelling being purchased.

Dan,

Yes - after further reflection, that is correct.

Original Poster:
A related question on my scenario above - where the mobile home park is selling the individual parcels of land to the unit owners. When we prepare our LE & CD, would the Sale Price on the LE and CD (page #1) reflect only the sale price of the land? (For example, $250,000?) The appraisal reflects the total value of the land plus the coach - for example, $450,000. The coach is affixed to the land by the time we close. I'm thinking we only show the Sale Price of the land on the LE & CD, not the combined appraised value, is that right? Thank you!

Yes, you would only include the sale price of the land. It doesn't sound like anything else is being sold, so there would be no option to include personal property also being sold in the sale price.

Thank you very much for confirming!