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Home Used for Business Line of Credit-HMDA Report?

Answered by: 
John Burnett
Jim Bedsole

Question: 
Is the following scenario HMDA reportable? The borrower owns his primary residence free and clear. He is going to use this home for a business line of credit. The purpose of the business line of credit will be for him to purchase homes, repair or remodel and resell. (He is flipping them.) We will be advancing funds and depositing to his checking account and we will have no interest in the homes that he flips.
Answer: 

by John Burnett:

The line of credit would be reported as a business purpose home purchase loan.

Answer: 

by Jim Bedsole:

Technically, John, wouldn't it be reported as a business purpose home purchase line of credit? And then only if you meet the origination threshold for lines of credit (500) in each of the preceding two calendar years?

Answer: 

by John Burnett:

Good catch, Jim. Absolutely correct.

First published on 08/12/2018

Filed under: 
Lending
Filed under lending as: 
HMDA

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