A good post turkey day to all of us that have to work today

We have a loan that is classified as community development. The loan was intended to be used to remodel a vacant building which was located in a 'Middle-income distrssed tract" and was also part of the city's redevelopment area. It was supposed to have allowed new tenants to move in and bring new jobs to the area, thus revitalizing the area.

Several months after the loan was made, little work has been done to the building, the borrower is now deceased, the loan past due and the building has been put up for sale.

Should we no longer consider this loan for community development since it does not appear that the funds were used as originally intended?
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It was community development when you did the loan. So it is still a community development loan for CRA for that year. As long as your data supports the CDL designation.

IMO count it as community development. The tract was on the governments distressed list and is still in the city's redevelopment area which carries some CRA credit as well as some possible tax credit for the bank as well.

Being in a city redevelopment area in itself would probably be enough for CD credit. As long as you can explain to examiner the initial reasoning which gave you CD credit, what has happened and that due to redevelopment plans of the city future owners of the property would have to comply with some redevelopment requirement that would also qualify as a CD I think your covered. In addition the loan is still in a designated distressed census tract.

OK, I will leave it on our list. I'm glad that I asked.

Thanks so much for the help again.