Business purpose loans - HMDA reporting

Posted By: Aruba123

Business purpose loans - HMDA reporting - 01/28/22 07:51 PM

Hello - I have been looking at HMDA for so long and need some clarity on the below scenarios.

1. A business purpose loan where the collateral is free and clear and the proceeds will be used to replenish borrower's funds would NOT be HMDA reportable as it is not a purchase, refinance or home improvement. Anyone disagree?

2. Would the same loan as above be reportable if the borrower was purchasing a property (purchase) or improving a property (Home Improvement and the property being purchased or improved is not a dwelling (they are commercial properties or the purchase of equipment)?

3. For a business purpose loan where the borrower's residence is being refinanced (meets the definition) and the proceeds are being used to purchase a commercial or investment property be reported as a refinance. Anyone disagree?

Any clarity would be appreciated.

Thank you
Posted By: raitchjay

Re: Business purpose loans - HMDA reporting - 01/28/22 08:11 PM

1. agree

2. not reportable (just for the record, you can't call something "home improvement" if the structure being improved isn't a home

3. Please define "investment property"....is that a dwelling or not? If a dwelling, then reportable as a purchase. If not a dwelling, then yes, reportable as a refinance.