Construction CRA Reportable as Other Business Loan

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Question:

I'm new at CRA and while I'm sure a construction loan isn't HMDA reportable and wouldn't be CRA reportable as Small Business (collateral is residential property). Is it possible a construction loan could be CRA reportable as Other Business Loan? My borrower is building homes for business purpose, secured by the residential property being built.

Answer:

Construction loans will never be small business loans for CRA (type 1 or type 3). A general purpose working capital loan to a builder could end up in small business if amount is $1 million or less.

Otherwise, construction loans come into play if they can qualify for community development credit.

First published on BankersOnline.com 8/6/12