I have some confusion on how to report construction to perm loans on the small business/farm LAR. According to the getting it right guidance, at the time the loan originates (year 2022), it is a construction loan and not reportable. If the conversion to a permanent loan (i.e., principle payments) is completed in a different reporting year (year 2023), then the loan wouldn't be reportable for that year either since there was no 'credit activity' - the loan was not refinanced, not renewed and there was no increase to principle.

I'm getting some feedback from my examiner that these loans need to be reported - either at origination or when the loan converts (both are acceptable as long as it is consistent), but I don't see this documented in any of the guidance?

I am confused. These are one-time close loans that include the construction and permanent phase in the original legal obligation? Using the term conversion to permanent is confusing. Is it just all one loan from the get-go?

I believe the confusion comes from these potentially being reported on the call report as construction during the construction term (not a reportable call report code) and CRE during perm, which is reportable. We report them at origination as if they are CRE. I have never seen written guidance on this, but have had it accepted (though not specifically blessed) by examiners. Using the "conversion" date would be very difficult to document, and I do believe the intention is for these loans to be counted as small business loans (if under a million).

We have the same situation....and it is one loan from the beginning, one closing, one note... At some point the Call Report code changes from construction to CRE.
We asked an examiner and they said about the same thing: be consistent with what you do. SO we too report them at origination, rather that when the Call Report changes.