Land contracts and HMDA reporting

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Question:

Land contracts are common in our lending area. Some of them have clauses whereby all funds paid under the agreement count as rent should the lessee of the property default. Are those land contracts HMDA reportable?

Answer:

No. The revised HMDA rule differentiates between land contracts (sometimes called lease purchase agreements) where funds revert to rent in event of default and contracts where the lessee has gained an ownership interest and might be owed funds. It will be necessary to review the contracts to determine if a particular transaction is HMDA reportable.
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Learn more about Kathleen Blanchard’s webinar
Extensions of Credit and the Bigger HMDA Picture - Identifying Reportable HMDA Transactions