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#162380 - 02/21/04 12:59 AM Is this CRA and HMDA?
Anonymous
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Bank makes customer (company) a purchase money loan to buy 8 rental houses in LMI areas and customer rents to LMI individuals. Would this be HMDA and CRA reportable?

Second scenario is where bank makes an equity loan to a company that owns duplexes and apartments. Rural development authority has subordinated their lien position and documentation shows this housing is for elderly and handicapped. Could this meet CD test or would it be small business loan or HMDA? I'm thinking no on small business due to residential real estate, but maybe yes on CD and HMDA.? Thanks

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#162381 - 02/21/04 01:10 AM Re: Is this CRA and HMDA?
Princess Romeo Offline

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Quote:

Bank makes customer (company) a purchase money loan to buy 8 rental houses in LMI areas and customer rents to LMI individuals. Would this be HMDA and CRA reportable?


This would be HMDA reportable as a purchase loan for Non-Owner Occupied 1-4 Family Property. It would not be reportable as a CRA small business loan, nor is it reportable as a Community Development Loan.

(This is one of those unintended regulatory loopholes because single family dwellings are involved. It is pointless to try to explain why, it simply is.}

What you CAN do is keep this loan on your internal register as a Type 03 and provide it to the examiners to consider during your CRA exam.

Quote:

Second scenario is where bank makes an equity loan to a company that owns duplexes and apartments. Rural development authority has subordinated their lien position and documentation shows this housing is for elderly and handicapped. Could this meet CD test or would it be small business loan or HMDA? I'm thinking no on small business due to residential real estate, but maybe yes on CD and HMDA.? Thanks


This is also HMDA reportable as a Multi-Family loan (purchase or refi doesn't matter for Multi-Family), AND if the equity was used to improve, repair or maintain the property, if if the loan in any way assists the borrower in maintaining the property, you get to report this as Community Development since it provides housing for low- and moderate-income persons.
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#162382 - 02/23/04 01:48 PM Re: Is this CRA and HMDA?
Anonymous
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1.Am I understanding correctly that regardless of the purpose if it's multifamily it's HMDA reportable? (ref. appendix A of HMDA)

2.Regarding this type 03 code...if the 1-4 family dwelling to LMI individuals could not be added to CD loans on lar would it be considered just in a general nature by examiners? I had read something by anonymous regulator that loans not collected for CRA under the call report definition are eligible for consideration as CD loan as long as they meet 1 of 4 components such as affordable housing. But, it must mean if it's not already reportable under HMDA.(?)

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#162383 - 02/23/04 07:24 PM Re: Is this CRA and HMDA?
Princess Romeo Offline

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Quote:

1.Am I understanding correctly that regardless of the purpose if it's multifamily it's HMDA reportable? (ref. appendix A of HMDA)


For the most part, yes. Purchase, refinances, and improvement on Multi-Famioly are all lumped in under the Multi-Family purpose code for HMDA.

However, an equity loan on an apartment building may not necessarily be reportable at all. For instance, an equity loan on an apartment building for the borrwer to use in his manufacturing business would not be reportable.

Quote:

2.Regarding this type 03 code...if the 1-4 family dwelling to LMI individuals could not be added to CD loans on lar would it be considered just in a general nature by examiners? I had read something by anonymous regulator that loans not collected for CRA under the call report definition are eligible for consideration as CD loan as long as they meet 1 of 4 components such as affordable housing. But, it must mean if it's not already reportable under HMDA.(?)


The only loans that can be double reported on HMDA and CRA are multi-family property for low- to moderate-income persons. 1-4 family property loans for the same purpose are only reportable under HMDA. Yeah - it doesn't really make that much sense, but there you are.
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#162384 - 02/24/04 08:18 PM Re: Is this CRA and HMDA?
starfish Offline
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Seattle
Bonnie- we made a commitment to a low income housing development association to fund the construction of 12 SFR for low income borrowers. Because it involves 12 units, can I report it as a CDL?

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#162385 - 02/24/04 09:30 PM Re: Is this CRA and HMDA?
Princess Romeo Offline

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If the loan were on 12 completed units, then I would say "No" because they are each 1-4 family residential and the CRA regs clearly state that 1-4 family that is reportable on HMDA is NOT reportable as Community Development.

HOWEVER, since you are making a construction loan, it is not reportable for HMDA, and it is also not reportable as Small Business, so if it has a Community Development purpose, then you can report it as a CD Loan.
_________________________
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Regulations are a poor substitute for ethics.
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#162386 - 02/24/04 09:57 PM Re: Is this CRA and HMDA?
starfish Offline
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starfish
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Seattle
Thank you so much for the clarification. We should be okay reporting them because they were temporary construction. We have the examiners here right now looking through our CDLs and I started to question myself.

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#162387 - 02/24/04 11:34 PM Re: Is this CRA and HMDA?
Anonymous
Unregistered

Quote:

...and the CRA regs clearly state that 1-4 family that is reportable on HMDA is NOT reportable as Community Development



So anything that is HMDA reportable (other than multi-family) would NOT receive any CD credit? Is that correct?

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#162388 - 02/25/04 12:48 AM Re: Is this CRA and HMDA?
SJB Offline
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SJB
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California
janice -

They might not go on your actual CRA report but you should do write-ups on these loans for your examiner and he/she will find a way to incorporate them into your evaluation.
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#162389 - 02/27/04 08:30 PM Re: Is this CRA and HMDA?
SMQ, CRCM Offline
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And, if I am following this correctly, it is also possible for 1-4s to be on your CRA report as Type 3 loans. This would be the case if you made a loan for working capital and took the home as collateral. Since this loan is not a purchase HI or refi; it is not HMDA reportable for 2003 submission----but a refi of this same loan will be HMDA reported in 2004 data collection.
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#162390 - 02/29/04 02:33 PM Re: Is this CRA and HMDA?
Anonymous
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Several years ago, the Dallas FED published a CRA Loan Data Collection grid to help determine what types of loans are Small Business, HMDA or Community Development. I use it all the time. You can get it online from their website www.dallasfed.org

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#162391 - 02/29/04 09:19 PM Re: Is this CRA and HMDA?
SMQ, CRCM Offline
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Yes, it's great for the quick and dirty. This might be a more direct link CRA Loan Data
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