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#338209 - 03/24/05 08:05 PM What to do with a partially developed lot?
RR Becca Offline
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RR Becca
Joined: Sep 2004
Posts: 5,249
out of the frying pan...
The land is graded and curbed, has a paved parking area and turning/access lane. Our borrower is purchasing as is, and plans to hold the lot for future construction. What the heck do I do with this? I sure wouldn't call it vacant land, but to me it doesn't really meet the definition of "nonfarm, nonresidential property" either. I'm torn between 1e and 1a, and 01 and 09.

BAH! Lenders!
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CRA
#338210 - 03/24/05 08:17 PM Re: What to do with a partially developed lot?
Anonymous
Unregistered

IMO - I would call it a land loan (1a). The definition also includes land that was to finance future development. Since it is real estate secured it should reside in 1 and it is not for agricultural or faming purpose so that further tells me that 1a is where it would go.

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#338211 - 03/24/05 08:31 PM Re: What to do with a partially developed lot?
Creditcopper Offline
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Creditcopper
Joined: Sep 2004
Posts: 203
Michigan
Quote:

The land is graded and curbed, has a paved parking area and turning/access lane. Our borrower is purchasing as is, and plans to hold the lot for future construction. What the heck do I do with this? I sure wouldn't call it vacant land, but to me it doesn't really meet the definition of "nonfarm, nonresidential property" either. I'm torn between 1e and 1a, and 01 and 09.

BAH! Lenders!



The way you describe the loan purpose and the partially developed collateral if it was at our shop I would have operations code it as a 1a for call report and type 9 for CRA.

The language I lean on from call report instructions is " secured by real estate made to finance land development (i.e., the process of improving land -- laying sewers, water pipes, etc) preparatory to erecting new structure or the on-site construction of industrial commercial, residential, or farm buildings. It goes on to say "Also include in this item, (2) loans secured by real estate the proceeds of which are to be used to acquire and improve developed and undeveloped property".
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#338212 - 03/24/05 10:01 PM Re: What to do with a partially developed lot?
HRH Dawnie Offline
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HRH Dawnie
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
It's handy to have the call report guidelines out when you're arguing with the lenders Becca. While CRA spells things out somewhat, the real answer (CCBanker posted) is quite clear in the call report guidelines. You don't have to print the entire book (quite a large ream of paper!) but the lending section is really handy.
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