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#2176946 - 05/07/18 03:40 PM Tiny Homes
Frosh Offline
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Joined: Mar 2015
Posts: 89
My Bank is in the process of taking applications for 2 tiny home loans.

From this BOL thread, https://www.bankersonline.com/forum/ubbthreads.php/topics/2102215,
I gathered that the tiny houses would be subject to Reg. Z ATR rules, and flood would not apply.

However, how should the Bank classify tiny houses?

Should they be classified as recreational vehicles even though it will be the borrower's primary residence?

Or should the Bank create another designation?

Note, tiny homes are a separate designation in the Bank's loan policy.

Thank you in advance.

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General Discussion
#2176951 - 05/07/18 04:08 PM Re: Tiny Homes Frosh
rlcarey Online
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rlcarey
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Posts: 83,226
Galveston, TX
You first have to define what you mean my tiny home - is it mobile, are they using it like an RV or is it permanently located? There is no common definition.
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#2176965 - 05/07/18 04:24 PM Re: Tiny Homes Frosh
Frosh Offline
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Joined: Mar 2015
Posts: 89
Thank you, Randy.

Here, the tiny homes will be a dwelling unit affixed to a trailer.

The, the Bank will get a title for the trailer, and a UCC for the dwelling unit.

The tiny homes will be mobile, and not attached to land.

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#2176966 - 05/07/18 04:25 PM Re: Tiny Homes Frosh
Frosh Offline
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Posts: 89
The borrower will place the tiny homes in one location as a residence, but the tiny homes can be moved at any time.

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#2177043 - 05/07/18 08:17 PM Re: Tiny Homes Frosh
Tracey, CRCM Offline
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Gorham, ME
We do tiny homes financing however they are classified as RV loans as they are not permanently affixed and can be moved.
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#2177051 - 05/07/18 08:30 PM Re: Tiny Homes Frosh
rlcarey Online
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rlcarey
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Galveston, TX
Right, but they still would be a dwelling under Regulation Z and have to be treated as such.
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#2177052 - 05/07/18 08:33 PM Re: Tiny Homes Frosh
Tracey, CRCM Offline
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Gorham, ME
We do not allow them to be primary residences. They are campers.
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#2177060 - 05/07/18 08:56 PM Re: Tiny Homes Frosh
Frosh Offline
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Posts: 89
So you do not report the loan as HMDA?

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#2177098 - 05/08/18 12:42 PM Re: Tiny Homes Frosh
Tracey, CRCM Offline
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Gorham, ME
No we don't. They aren't dwellings as they are not lived in as primary residences and are on wheels. They are campers.
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#2177121 - 05/08/18 01:18 PM Re: Tiny Homes Frosh
RR Joker Offline
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The Swamp
RVs are exempt from HMDA.

Tracey, how in the world do you 'not allow' someone to occupy their RV as their residence? It's not all that uncommon really.
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#2177122 - 05/08/18 01:20 PM Re: Tiny Homes Frosh
RR Joker Offline
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RR Joker
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The Swamp
Speaking of the "Tiny Home" epidemic. I think we will see more and more 8 x 10 and up "Cook Buildings" turned into residences. Even though these aren't all that hard to transport, I'm pretty sure they would be considered 'affixed' as in a 'crawl space' and very likely reportable. Verifying this 'status' may be quite interesting...and nearly impossible unless a customer expressly discloses the use of said building laugh!
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#2177445 - 05/09/18 06:29 PM Re: Tiny Homes Frosh
Tracey, CRCM Offline
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Posts: 542
Gorham, ME
They might reside in it, but when the loan is closed, its a camper not their primary residence (I will have to note though that we have only 2 loans for these so far)- I expect to get more however because we have a commercial customer who builds them. I am just waiting for them to ask if they can advertise our loan products for purchasers of the tiny homes, and then my whole thought process will change.
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#2177503 - 05/09/18 08:05 PM Re: Tiny Homes Frosh
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Tracey, so if I tell you I'm going to purchase a "tiny home" to live in you will not finance it for me. But if I tell you I'm going to use it as an RV you will?

I see all sorts of legal battles which I'm 99% sure the bank will lose.

If I buy a van and tell you I'm going to live in it then under Reg. Z that is a dwelling. If you are aware your customers intend to live in the tiny home once purchased then they are dwellings for Reg. Z purposes regardless what you classify them as and you have to disclose them as such.
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#2177536 - 05/10/18 12:05 AM Re: Tiny Homes Frosh
burke116 Offline
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Joined: Jun 2014
Posts: 562
Petersburg, VA
(19) Dwelling means a residential structure that contains one to four units, whether or not that structure is attached to real property. The term includes an individual condominium unit, cooperative unit, mobile home, and trailer, if it is used as a residence.

2. Use as a residence. Mobile homes, boats, and trailers are dwellings if they are in fact used as residences, just as are condominium and cooperative units. Recreational vehicles, campers, and the like not used as residences are not dwellings.

If it's going to be used as a residence, it's a dwelling under Regulation Z.

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#2177839 - 05/11/18 03:34 PM Re: Tiny Homes Frosh
Andy_Z Offline
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I think the issue I'm reading is that Tracy appears so adamant in her posts that I see the banker shaking his head "no" and asking, "is this going to be your residence" then shaking his head "yes" "or is this just a camper you will use on occasion?"

I suppose the loan app with another address and hopefully a mortgage payment makes this clear to avoid one of those mail boxes that appears to be a street address. So, what's on the app and does the bank believe this will be a residence?

I want to also say KB studied this a lot and also mentioned the need to meet manufactured housing codes to be considered, but she'd have to weigh in on this as it's been awhile since we spoke on it.
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