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#565698 - 06/12/06 08:57 PM hmda-home improvement or purchase?
laf0915 Offline
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Joined: May 2006
Posts: 236
We had a construction loan to build a shop with living quarters on property that already has a log cabin (secondary residence) on it. We have now refinanced that construction loan into long term loan. Do we report this for hmda as a purchase (since shop has living quarters) or as home improvement since it improves the secondary residence (log Cabin)

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#565699 - 06/12/06 09:02 PM Re: hmda-home improvement or purchase?
Mrs. Rizzo Offline
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Mrs. Rizzo
Joined: Mar 2006
Posts: 10,392
Curled up by the fire...
In my opinion it would be home improvement
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#565700 - 06/12/06 09:27 PM Re: hmda-home improvement or purchase?
dgp Offline
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Posts: 145
I would also consider it to be a home improvement.

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#565701 - 06/13/06 01:18 PM Re: hmda-home improvement or purchase?
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I am assuming this shop is not a business operation. Based on that assumption I would advise looking to the square footage used for residential use vs non-residential use. If the square footage for residential use is greater than the non-residential use then you have a dwelling and IMO a purchase transaction. If the non-residential square footage is greater then you have a HI.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#565702 - 06/13/06 02:29 PM Re: hmda-home improvement or purchase?
laf0915 Offline
100 Club
Joined: May 2006
Posts: 236
Thanks for the opinions. I will check with the loan officer on the residential vs. non-residential usage.

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#565703 - 06/13/06 05:20 PM Re: hmda-home improvement or purchase?
arb Offline
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Joined: Jan 2005
Posts: 102
Illinois
I thought purchase trumps HI???

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#565704 - 06/13/06 05:40 PM Re: hmda-home improvement or purchase?
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
It does, but if the square footage for non-residential use exceeds the square footage for residential use then you would not have a dwelling.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#565705 - 06/13/06 05:41 PM Re: hmda-home improvement or purchase?
arb Offline
100 Club
Joined: Jan 2005
Posts: 102
Illinois
I see.

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#565706 - 06/14/06 04:53 PM Re: hmda-home improvement or purchase?
Busy Bee, CRCM Offline
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Joined: Feb 2004
Posts: 1,089
PacificNW
FWIW, I completely agree with Dan's response above. We'd report it as a purchase (if the square footage of the residential portion is larger than the shop).

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#565707 - 06/19/06 09:54 PM Re: hmda-home improvement or purchase?
MyScamper Offline
Gold Star
Joined: May 2006
Posts: 452
Between here and there
Question - how would this now be reported as a purchase if title to the property had transferred with a previous loan? How could it be home improvement if the proceeds are not for improvement, but to pay off another loan? Since both loans are secured (at least in part) by residential property, wouldn't this be a refi? Previous purpose does not matter.

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#565708 - 06/20/06 12:57 AM Re: hmda-home improvement or purchase?
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
The conversion of a construction loan to permanent financing is reported as a home purchase, not a refinancing.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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