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Home Improvement & Purchase-HMDA Purpose

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Question: 
Our customer has ownership interest in a primary dwelling and is doing a loan for home improvement and buying out the other owners. So this is both a home improvement as well as purchasing the full interest in his home. What loan purpose would this be under HMDA?
Answer: 

Because the borrower already has an interest in the property, he isn't acquiring an interest in something he doesn't already own, so you ignore the "purchase" aspect of the transaction for HMDA purposes. Record it as a home improvement loan.

First published on 03/15/2020

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