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Second Home or Investment Property?

Answered by: 
Randy Carey

Question: 
Our borrower applied with the occupancy type shown as a second home. Underwriting determined the occupancy type is an investment home. The loan was denied due to insufficient collateral based on the property type as an investment home and not a second home. Should we report on the HMDA LAR as a second home or an investment property?
Answer: 

I assume that underwriting determined/clarified that the borrower did not normally actually occupy the home part of the year. If that is the case, then I would report it as investment property, as that is what it would be actually considered regardless of whether the applicant indicated differently on their application.

First published on 12/13/2020

Filed under: 
Lending
Filed under lending as: 
HMDA

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