Posted By: CariM
Commercial Construction Loans and HMDA - 03/07/23 09:44 PM
Hello,
Our Commercial Loan Department recently decided to change how construction loans are structured and I am struggling with the HMDA reporting. The borrower is approved for both the construction loan and permanent financing (12-month construction period & 168-month perm. period) at the time of origination; however, the note is only for the 12-month construction period. The permanent financing is put in place via a loan modification at the end of the construction term. Does this scenario meet the definition of temporary financing if the permanent financing is accomplished by a modification rather than a new note? Should we report these loans for HMDA? Thank you.
Our Commercial Loan Department recently decided to change how construction loans are structured and I am struggling with the HMDA reporting. The borrower is approved for both the construction loan and permanent financing (12-month construction period & 168-month perm. period) at the time of origination; however, the note is only for the 12-month construction period. The permanent financing is put in place via a loan modification at the end of the construction term. Does this scenario meet the definition of temporary financing if the permanent financing is accomplished by a modification rather than a new note? Should we report these loans for HMDA? Thank you.