Reported a renewal of a line of credit with the proceeds being used for "investment property". The borrower purchases rental property. The loan is secured by 3 rental homes. The property address on the Loan Register is showing NA. Shouldn't we geocode one of the properties listed as collateral or the borrower's home address? Or since this collateral is residential property, should the loan be reported? Also, repayment will be from cash flow and retirement income, bank recorded revenue code as "1", but we're thinking it should be "3"? Thanks for your assistance!

Loans secured by residential real estate should not be reported as small business loans for CRA. If you choose to, you can collect information about this kind of loan under type 3 Other Lines/Loans for purposes of small business and present it to examiners during your exam.

Remember however, collect only one origination per loan per year. Renewals are considered originations for purposes of CRA.

Typically you would geocode either the address where funds are used or the business address. If the borrower has not determined where the funds will be used--I would geocode their address, not the collateral address.

For collecting revenue information--if you have the cash flow information from the real estate investments it would seem appropriate to use it. The thing about revenue reporting is that you need to be consistent in how you do it and you don't want to mix personal income with revenue.

I hope this helps.

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Typically you would geocode either the address where funds are used or the business address. If the borrower has not determined where the funds will be used--I would geocode their address, not the collateral address.

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As Risa so wisely points out, either address is acceptable. I use collateral address but if a lender uses a business address (if the rental business is run out of their home that would be it) I will accept that as well. The tip is to be consistant. If you geocode to the lowest income tract, etc, it looks like you're padding your numbers unfairly (which you would be). For this reason I use collateral. The one exception is that for out of state loans I use the Alaska address. I do this consistantly so it's not an issue with my regulators (who report that my data integrity is above and beyond anal retentaive) In this world that means "nifty keen, keep it up"

As to revenues, you did collect information on the rental revenues and if that figure (minus the income) is below one million, yes it's a revenue code 1. Just because you used two types of repayment (income and revenues) does not mean you exclude reporting the actual revenue code appropriate to the deal. A 3 would only be used if you used his income exclusively in this case.

Again though, it's a type 3 loan (small business loan secured with residential real estate) so it's a moot point But you did get two answers out of the bargain!