Hi All,

Are construction loans for both residential and commercial counted as loans in the lending test for an ISB bank?

If the loan meets a community development purpose, yes.

Thank you, but if it does not meet the Community Development test can I still count a construction loan (Residential and Commercial) in the lending test? Example: If a construction loan is not counted in the community development loan test can it still be counted in the lending test?

Well, you can present all of your loans in an exam to demonstrate how you serve the AA (you can present consumer purpose, construction, whatever you want). Banks of any size can do that, especially if they do not do a lot of small business or HMDA reportable and need to make the case that they do support the community credit needs.