Randy Carey—
Official Interpretation
Paragraph 3(c)(3)
2. Loan or line of credit to construct a dwelling for sale. A construction-only loan or line of credit is considered temporary financing and excluded under § 1003.3(c)(3) if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale. See comment 3(c)(3)-1.ii through .iv for examples of the reporting requirement for construction loans that are not extended to a person exclusively to construct a dwelling for sale.
Dan Persfull—
Randy responded with the appropriate cite from the regulation concerning a construction loan only to construct a dwelling for sale.
However, a loan for a purchase/construction needs additional clarification. Are they purchasing a dwelling and renovating it for resale, are they purchasing the dwelling to raze it and construct a new dwelling for resale? If yes then the loan is not exempt from HMDA reporting.
Randy —
Good point Dan. I never thought about that. It might be what we call "a tear down, throw up."