We originally had a HMDA-reportable one-time close loan to build a primary residence. I know the Loan Purpose for that was purchase. However, before this loan converted to permanent financing, it was paid off by another one-time close loan that added additional funds to improve/add onto the home. Are we correct to report the 2nd application/loan with the Loan Purpose of 32 (Cash-out Refi) and not a purchase, despite the conversion not technically taking place yet from a process/systemic perspective? Thanks!

I don't believe the loan you describe meets the HMDA definition of a home purchase loan as described. If the loan were to complete the home (not "improve/add onto" it), that would be different in my opinion. As is, it is not replacing a construction only loan, and isn't a construction/perm loan (at least in my opinion).

Just thinking out loud here. But if you are refinancing a loan for initial construction and adding additional money to complete the construction, is that not still an initial construction loan? Was the home actually completed when the second loan was made?

Randy, I'm home and can't really pull up the regulation, but Reg C says a home purchase loan includes the permanent financing 5hst replaces a construction only loan....the OP stated that the loan being extinguished was a combined construction/permanent loan....to me, that disqualifies it as a home purchase loan (unless as I stated, the new loan completed an unfinished home).

Also the OP expressly used the terms "improve" and "add on to the home"...so I took that at face value.

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