Posted By: HMDAHamsterWheel
"exclusivity" of building SFR exclusively to sell - 04/21/22 05:32 PM
"A construction only loan or line of credit is considered temporary financing and excluded under Regulation C if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale."
The phrase construction only loan exclusively to build a house for sale is all over the place... But what about the lot? The builder has to buy a lot or if they own it already refinance a lot loan to build the house for sale....Buying a lot or refinancing a lot would mean the funds are not "exclusively" used for building a house to sell....
1. Wouldn't a builder getting a loan to buy a lot and to build a dwelling for sale still be excluded?
2. Would building a house for sale...and also paying off say credit cards also be excluded from reporting? Paying off credit cards is excluded from a business purpose HMDA transactions since it's not to purchase a dwelling, refi a dwelling or make home improvements... So why would adding an additional excluded transaction to a builder to sell loan make it not an excluded transaction?...
3. Is the "exclusivity" really just so if something additionally being done with the funds that would make it HMDA reportable (dwelling purchase, refi or home improvements) doesn't prevent the loan from reported?...
4. It also says to a person in this exclusion. We can use this for entities too, right?
To be reportable for HMDA a business purpose loan has to be a home purchase, refi of a dwelling or home improvements...so it doesn't make sense to me that adding additional funds (that would be excluded for HMDA reporting)to a construction loan would make it reportable....
Am I over thinking this? I was told a long time ago that with HMDA you need to throw all logic and common sense out the window...But I still want to make sense of this....
Has anyone had experience talking with the CFPB saying they are not reportable or anything?
The phrase construction only loan exclusively to build a house for sale is all over the place... But what about the lot? The builder has to buy a lot or if they own it already refinance a lot loan to build the house for sale....Buying a lot or refinancing a lot would mean the funds are not "exclusively" used for building a house to sell....
1. Wouldn't a builder getting a loan to buy a lot and to build a dwelling for sale still be excluded?
2. Would building a house for sale...and also paying off say credit cards also be excluded from reporting? Paying off credit cards is excluded from a business purpose HMDA transactions since it's not to purchase a dwelling, refi a dwelling or make home improvements... So why would adding an additional excluded transaction to a builder to sell loan make it not an excluded transaction?...
3. Is the "exclusivity" really just so if something additionally being done with the funds that would make it HMDA reportable (dwelling purchase, refi or home improvements) doesn't prevent the loan from reported?...
4. It also says to a person in this exclusion. We can use this for entities too, right?
To be reportable for HMDA a business purpose loan has to be a home purchase, refi of a dwelling or home improvements...so it doesn't make sense to me that adding additional funds (that would be excluded for HMDA reporting)to a construction loan would make it reportable....
Am I over thinking this? I was told a long time ago that with HMDA you need to throw all logic and common sense out the window...But I still want to make sense of this....
Has anyone had experience talking with the CFPB saying they are not reportable or anything?