Our customer has a guidance line and he uses it to purchases homes then he rents them out. When we fill out the application date and the loan amount do I fill it out for the guidance line or each loan individually?

I would do each individual loan. In my bank a guidance line is to streamline the approval process - you agree to lend the customer up to a certain total amount, in this case for the purchase of rental property. The customer then does not need a new approval each time he wants to buy a house.

The guidance line would not include any info on the individual loans, so you would have to use his place of business or home address as the location, for example. Now what if most of the rent houses are in low to mod areas, you would miss out on a reporting opportunity.

Maybe I'm not understanding what's going on here, but in my bank, a guidance facility is a commercial revolving line of credit. HMDA reporting of lines of credit is optional. I would lump this facility in with my HELOCs and other non-reportable revolving facilities and not report it under HMDA.

That said, you may be able to get CRA Community Development credit for this loan depending on where the properties are located, what the rents are, and the income of the renters. We have just such a customer in our bank and we got CD credit for it. Good luck.

Thanks for your input. We were leaning toward reporting the individual loans but thought we would get your thoughts.

I have also received instructions from our regulator that if the facility is a line of credit, be it commercial or HELOC, it is optional to report.

If you have a customer with a commercial revolving line of credit, and the customer uses that revolver to purchase and re-hab properties, then IMHO you would only report the line at inception and if you renew with a "new obligation" AND only if you also report your HELOCS.

However, a "Guidance Line" may simply be a pre-approved credit limit under which additional loans are advanced. In that instance you would report each individual loan. The trick is figuring out the "application date". You may want to set up a formal "request form" process so that you have a documented date for the file.