I know I have read about this somewhere! Is a loan to purchase an adult residential care facility HMDA reportable?

Dolly Nugent
VP/Compliance Officer
Citizens Business Bank

Dolly, BCG covered this in a recent seminar. From what I understand, a NURSING home is NOT HMDA reportable because it is considered "temporary" housing along the sames lines as a motel or hospital.

However, a retirement HOME IS reportable because the expectation is the residence is on a more permanent basis.

You may want to verify that with your regulator.

When the new HMDA Commentary came out with the definition of a dwelling we also got an opinion from the Federal Reserve staff that indicated dormitories, nursing homes, group homes, recreational boats and campers are not dwellings therefore not HMDA reportable.

Janet is correct. The commentary specifically excluded dormitories, nursing homes, group homes and etc from reporting, because they are not considered a dwelling by definition.

The question one must ask in regards to a nursing home is whether it is considered a dwelling. Under HMDA there are two options, a 1-4 family and a multifamily. If the occupants purchase their space at the retirement home, live there and re-sell it at some future date, I think that could be reportable as a 1-4. If the space is rented to the retiree, then at best it is a multifamily. Next you must consider how it is rented, -by the month, year or possibly longer. The more consistent the rental term is, the more likely it is to be reported. For example, if the double occupancy room is rented by the month without a lease term, I am not certain it can or should be reported. Just more to think about.

In checking my copies of previous HMDA discussions it was noted that the FFIEC web site has a HMDA Q & A section with the following info:
"nursing homes, dormitories and sorority/frat houses are viewed as temporary housing & are not HMDA-reportable since they were not built for permanent residency. In addition, a nursing home is more like a hospital in that it provides medical care which is ususally constant and extensive.

Assisted living and retirement homes are viewed as dwellings that individuals reside in permanently and are HMDA reportable. In fact, in most cases the 'home place' has been sold by the individuals who choose these homes as their new permanent dwellings."

Thank you to all that responded. I will print this thread and keep it in my HMDA Getting It Right book.

Appreciate the help!

Dolly

So, if you are doing a loan to a corporation to purchase the entire residential assisted living facility, this would be reported on your HMDA LAR? As a multi-family?

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The opinions expressed are not necessarily those of my employer.

So, if you are giving a loan to a corporation to purchase the entire residential assisted living facility, this would be reported on your HMDA LAR? As a multi-family?

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The opinions expressed are not necessarily those of my employer.

Buffy,
If the assisted living facility was basically "senior apartments", i.e. the structure will be inhabited by people who will consider that dwelling as their permanent address, then you have a basic HMDA reportable loan - loan made for the purchase or refinance of multi-family property.

This is where you need to look at the appraisal and perhaps business plan to truly determine the use of the property. Is this a nursing home, where patients will reside to receive care rather than stay in a hospital room? Or is this a retirement facility where the people will consider it as their home?

It does not matter if an individual, partnership, LLC, LLP, joint-venture, family trust, corporation, etc. purchase/refinance a multi-family residential dwelling. All are reportable on HMDA. (And yes - commercial loan officers are always surprised to hear that!)