Confusion Over HMDA Coverage

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Question:

Under HMDA, I understand vacation homes and rental/investment homes are HMDA reportable if they fall under the categories of home purchase, home improvement or refinancing. However, what if a rental agency, or even an individual, purchases a home at a vacation destination such as the beach solely for the purpose of renting it out to the public? Is it HMDA reportable? The purpose here is clearly rental income, so it would appear to be business-related and therefore not HMDA reportable. On the other hand, the collateral involved is a 1-4 family-type dwelling. Please end the confusion. </strong>

Answer:

I believe that is a rental purchase and subject to HMDA. I don't like the statement "The purpose here is clearly rental income so it would appear to be business-related and therefore not HMDA reportable." HMDA covers "business-related loans."

First published on BankersOnline.com 5/17/04