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Are short term home improvement loans reportable on HMDA?

HMDA exempts from reporting any loans that are for temporary financing. Temporary financing is not defined by the regulation; however, one definition used by banks is that a temporary loan is a loan with a maturity of 2 years or less that has a balloon payment and is to be repaid from other than earned income. Does this hold true for home improvement loans? What if a home improvement loan is amortized over 6 months or 12 months? Please advise me on whether or not short term home improvement loans are reportable on HMDA.

Answer by Andy Zavoina:

Consider the term and the source of repayment. I do not believe there is a concrete definition so first, decide how you want to handle it and do so consistently with similar loans.

Secondly, I believe that if the home improvement loan is short term, fully amortized, but expected to be paid by ordinary income, it would be reportable.


Answer by David Dickinson:

This posting will provide more information about Temporary Financing and HMDA.

First published on 3/17/03

First published on 03/17/2003

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