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#622092 - 10/05/06 09:27 PM Retirement Village
bOaty Offline
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bOaty
Joined: Aug 2006
Posts: 4,266
Chillin an grillin
We have a loan to a 'ABC' Retirement Village, a large non-profit that provides housing, assisted living, medical services, meals and alzheimers care. They have opened a revolving line of credit for $100,000 secured by a CD. Loan has been reported as a 4, commercial purpose but I disagree as the company is a non-profit.

My question is:

1) Can this be community development? Most seniors are in fact low/mod-income and the facility does take medi-cal payments for their convalescent services. However, the facility does not target only low-mod seniors and the fees can range anywhere from $1,942 to $5,617 per month.

2) If this loan is not a 4 and not CD is it then a 9?
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CRA
#622093 - 10/05/06 11:35 PM Re: Retirement Village
Don_Narup Offline

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Las Vegas Nevada
If you are refering to CRA loan type Code 4 Thats a "Home Equity" code. A 9 is "Other Loan Data"

Neither of these loan type codes are required to be reported on an annual CRA submission. So unless the bank is reporting consumer loans, this loan will not be reported.

You would have to document that the individul occupants of the village are in fact LMI individuals. You would have to break down the resident by income percentages and show the number of LMI individuals that actually live there.

Assuming that because elderly and medicare are involved makes it CD is not enough, and you will have to show numbers. In all probability this is not going to qualify as a Community Development loan.

You didn't mention the purpose of the line.

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#622094 - 10/06/06 03:38 PM Re: Retirement Village
bOaty Offline
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bOaty
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Chillin an grillin
Sorry, they have it coded is a '4a Commercial Purpose, loan amount is $1 million or less'. The borrower is a non-profit so if not CD wouldn't it then a 9?

The purpose of the loan is to fund operation pending gaps in receveivables.

Thanks for your help.
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#622095 - 10/06/06 04:28 PM Re: Retirement Village
Don_Narup Offline

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Las Vegas Nevada
Its not 4a as it does not meet the deffination of 4a in the call code instructions. (real estate secured)

Here are a couple of items from HMDA geting it right Guide

Refinancing._Refinancing means a loan transaction in which the existing obligation, involving either a home purchase or a home improvement loan, is satisfied and replaced by a new obligation.


Data to be excluded.

Do not report loans or applications for loans of the following types:

1. Loans that, although secured by real estate, are made for
purposes other than home purchase, home improvement, or refinancing (for example, do not report a loan secured
by residential real property for purposes of financing college tuition, a vacation, or goods for business inventory).
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#622096 - 10/10/06 03:43 PM Re: Retirement Village
Rie A Offline
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Rie A
Joined: Mar 2004
Posts: 829
Maryland
Since it is Non-profit and not secured by non-residential real estate, it would be coded a 9.

If you could pull together the CD angle you could go there. However, Don is correct that just because the tenants are elderly and the center takes medicare is not enough. You would have to do more documentation to prove it is a community development loan. It could be, you just have to find out if it is and document it.
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#622097 - 10/11/06 03:18 PM Re: Retirement Village
bOaty Offline
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bOaty
Joined: Aug 2006
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Chillin an grillin
Thanks Rie A for the clarification.
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