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#903660 - 02/12/08 09:38 PM construction to perm again
complyorelse Offline
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Dan, Is the trigger here that the construction period is over and that it is now P & I versus Interest Only?

Question: I work in commercial lending and we have several construction loans to builders that we are now having to extend the maturity date and modify the payments to P and I (principal and interest) because the homes are not selling. Is this HMDA reportable?

Answer: Yes. You are converting construction loans to permanent financing. You will report them as a home purchase. From page D-6 of A Guide to HMDA Reporting: Getting It Right:


I know of a case where the completed spec was under contract and interest only was extended for sixty days to allow time for the sale. HMDA reportable?

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#903827 - 02/13/08 01:01 PM Re: construction to perm again complyorelse
complyorelse Offline
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Joined: Nov 2007
Posts: 442
U.S.
In thinking through this, is it simply based on the fact the construction is over and we are offering continued financing? Terms of loan, payment structure and source of repayment aside, the construction is over and we've renewed it which would make it HMDA. Please confirm.

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#903856 - 02/13/08 02:02 PM Re: construction to perm again complyorelse
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 46,855
Bloomington, IN
If you made no commitment to modify these loans at their inception then modifications are not reportable. However, if by "renewing" the loan you are replacing the existing note with a new note then you would have a reportable home purchase loan.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#903858 - 02/13/08 02:04 PM Re: construction to perm again Dan Persfull
complyorelse Offline
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Joined: Nov 2007
Posts: 442
U.S.
OK. Thanks for all of your feedback.

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