I am having trouble deciphering what the gross annual income is of a partnership that purchased a dwelling for rental purposes. Should I use the dollar amount before the cost of goods sold is deducted? It appears to be so inflated due to the company also being involved in construction.

In reading the GIR in appendix A under income I found an option, I think...would it be safer to enter NA since the loan is in the name of the partnership? Also, if I choose to enter NA for this one, do I need to be consistent and enter NA for the other loans we did for non-natural persons?

See the instructions for reporting income on Pg A-7 of GIR:

If the applicant or co-applicant is not a natural person...enter "NA".

Right...that is what I read too. Just wasn't confident in using it randomly. May I use that code for just one loan, or would you suggest coding every loan that is a non-natural person with the NA? Consistency is important...right?

Every loan to a non-natural person should have an income of NA.

What if you have two applicants / borrowers - one is a non-natural person and one is a natural person. do you still report the income as NA? Or do you report the gross annual income of the the natural co-applicant if you relied on that income to make a decision?

I can read the GIR book two ways: "if the applicant or co-applicant is not a natural person, enter N/A" - does this mean that if either of the applicant's are not a natural person then you should put NA for income even if the other applicant/co-applicant IS a natural person?

As hmdadal stated every loan to a non-natural person the income should be reported NA. You don't have an option. Income reported on a non-natural person would be a reporting error on the LAR.



That's a good question. My opinion is;

If the loan is made to a natural person jointly with a non-natural person and the natural person's income was used in the credit decision then you report their income. I'm basing this primarily on the following:

. . . Similarly, if an institution relies on the income of a cosigner to evaluate creditworthiness, the institution includes this income to the extent relied upon. . . .

We use NA if the applicant OR co-applicant is a non-natural person. See. A-7 of GIR
d. If the applicant or coapplicant is not a natural person or the applicant or co-applicant information is unavailable because the loan has been purchased by your institution, enter “NA.”

Our argument being that if either is NOT a person, then the income data is skewed and it may appear that we made a loan to a lower income person when in fact, we also relied on the strength of the company or partnership.

Whatever stance you take, BE CONSISTENT!!!!

Thanks Dan and Soccer Mom. I've submitted my question twice to the HMDA Help email but have yet to receive a response. I know consistency is the key and I think one could argue both ways. We have always reported income of either the borrower or co-borrower if either is a natural person (and we relied on the income of the applicant). Hasn't been a problem yet but I know examiners are scrutinizing HMDA data integrity now more than ever and someone at my peer group brought up that I should be entering NA for income if ANY applicant is a non-natural person.....so it got me thinking that maybe I was non-compliant...ahhhh, the joys!