Requirements for Line of Credit Purchase

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Question:

We are making a loan for a $50,000 line of credit to an LLC. They will use it to purchase used mobile homes and place them on vacant lots that they have available. Once they have them in place, they will rent the vacant mobile homes to renters with lease agreements. My questions are: Do we need a flood certification for each used trailer that they purchase with the line of credit? Do we need to fill out a HMDA LAR for each mobile home purchased with the line of credit?

Answer:

Do we need a flood certification for each used trailer that they purchase with the line of credit?

If you are taking the mobile homes as collateral, then all flood regulations will apply.

Do we need to fill out a HMDA Lar for each mobile home purchased with the line of credit?

The reporting of lines of credit for HMDA is optional.

First published on BankersOnline.com 6/6/11