We do quite a few down payment assistant loans (purchase money subordinate liens) that are considered a deferred payment loan with 0.000% interest rate for the life of the loan. The note actually states that the interest rate is 0.000%. We do provide a LE and CD that states 0.000% however this is not an actual requirement of Reg Z on these loans.

I am wondering what to report on the HMDA LAR for the interest rate – 0.000 or NA?

The regulation states “The interest rate applicable to the approved application, or to the covered loan at closing or account opening” which to me means you should report 0.000.

Guidance also goes on to state “For applications that have been denied or withdrawn, or files closed for incompleteness, a financial institution reports that no interest rate was applicable to the application”. I can get this.

However, our testing has resulted in the following validity error when using 0.000%.

V677 / Interest Rate / Interest Rate; Action Taken / An invalid Interest Rate was reported. Please review the information below and update your file accordingly.

1) Interest Rate must be a number greater than 0 or NA, and cannot be left blank.

2) If Action Taken equals 3, 4, 5, or 7; then Interest Rate must be NA.


I did not get from the regulation, CFPB guidance, and other one off BOL and online searches that the interest rate had to be greater than 0. However, it seems that the only way to get rid of the error is to use NA.

Does this seem accurate?

I'm wondering if there was any ever clarification on this as we just purchased some Habitat loans with a zero % rate and are also getting the validity error.

It still appears that NA is the only entry that will work.

We have one of these now. Any thoughts on whether we report 0.000 or NA? The edits say you can't report 0.000 but the NA chart says you can't report NA for an originated loan....

If entering 0 yields a validity error, try NA. That's what this discussion seems to suggest.

Just to clarify further on this to see if it is a reportable loan. These zero interest "loans" don't require any monthly payments are are forgivable 1/120th each month until the end of year 10. If the loan is paid off at any time during the 10 year period the remaining loan would be required to be paid at that time. Is this reportable?

I want to revive this. See last question. Also, if reportable, what would you put for "Other Non-Amortizing Features"? It is forgivable so much per month so I was thinking no.

Any recent thoughts on what to put for these 0% interest loans? Is NA still it?