We have a loan that is coded as a home improvement secured by a CD for the term of 6 months. The loan is to purchase dirt to place in the driveway because of recent rains. At the same time we have a construction/perm loan on a house located at the same property due to be completed by January. The lender states that the loan will be consumed into the permanent loan financing. My thought is that it would still be HMDA reportable because this is a separate loan with a collateral other than the dwelling/property. Or, is it considered temporary financing because the proceeds from the construction/perm will be paying off the loan?

Home improvement is improvements on a dwelling or on the real property on which a dwelling is located. I would say not reportable if the dwelling has not been completed yet (assuming there is not another dwelling on the property).

Sounds like temporary financing and not reportable to me.

Thanks. That was the ultimate decision.

So is a term of 1 year line of credit considered temporary financing for HMDA Purposes?

So is a term of 1 year line of credit considered temporary financing for HMDA Purposes?

Depends on the repayment source. A 1 year loan is not automatically a temporary loan, it could be just a short term loan and short term loans are not exempt.