Need some help. I have a HMDA reportable loan, purpose is to purchase a rental house but the collateral, securing the loan is the customer's primary residence. If I understand the regulation, I will report the Property Location for the primary residence, so wouldn't the owner occupancy status need to be a 1 for owner occupied? My loan processor thinks it should be a 2 since the purpose is to purchase a rental house.

I am a little confused about the transaciton-is your customer taking cash out of their primary residence to purchase the investment property? If that is the case, it should be reported as owner occupied, since your transaction is based on that property-The purpose of the cash out is irrelevant.

The way I understand it, you would code it a "1" owner occupied because it is secured by the primary residence.

Page D-10, Occupancy, among other things, it says "institution reports the owner-occupancy status of the property for which property location is being reported. see 4(a)(9)"

Page D-12 4(a)(9) 2. Property Location--"For a home purchase loan, an institution reports the property taken as security. If an institution takes more than one property as security, the institution reports the location of the property being purchased...."

It appears that you are right, security is customer's residence, report occupancy as 1. If you take both, use purchased property and report as 2.

SoccerMom's analysis is correct.

You always report the appropriate information for the dwelling/property that is being reported on the LAR.

Thanks Dan, boy did I need to feel like I did one thing right today!!! Working on HMDA and CRA, exam starts Monday, board meeting, annual meeting and my PC is not cooperating............On top of all that, I thought today was Friday, jeeza louisa! Maybe I should just open the bar.

Thanks to all of you. You've been a big help! Have a great weekend.

Sorry to bring this thread back up, but I just want to make sure I am doing this correctly. My question was the exact same as the original one, and I understand the occupancy code should relate to the property being reported, not the property being purchased. So, if a rental house is being purchased, but the loan is secured by the primary residence, the occupancy code is owner occupied. My question is, is the purpose code still a 1 (purchase)? Thanks for your help!

Purpose would be purchase.

Thanks...I don't know why I doubt myself!