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Purchase/Rehab & Props Unknown-HMDA Reportable?

Question: 
HMDA: application is for an internal guidance line of credit ($1.5M) to purchase and rehab SFRs with the intention of leasing and/or sale. Properties at this point are unknown. Borrower will purchase and rehab properties with his own money and will come to lender to recover 75% of the costs of purchase and rehab. What part, if any, is HMDA reportable?
Answer: 

Jim Bedsole

Is the line of credit secured by a dwelling? If so, it may be HMDA reportable. There are too many variables to that to give you a clear answer on that front without knowing more facts about the transaction. If not secured by a dwelling, unless the line of credit is classified as a home improvement loan by your institution, it would not be HMDA reportable.

Answer: 

Dan Persull

Borrower will purchase and rehab properties with his own money and will come to lender to recover 75% of the costs of purchase and rehab.
These transactions are to replenish your borrower's funds, not to purchase a dwelling. These transactions will not be reportable based on the above statement.

First published on 09/08/2014

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