Good morning. While a construction loans are excluded from the LAR, would it make any difference if the collateral on this note not only included the house being built but also included another completed and occupied 1-4 residence? I am running into the issue when the contruction note (with the additional collateral) matures and is refinanced into another note. (again with the same additional completed and occupied residence). The purpose of the new note is still for construction purposes. My question is can this be classified in any way as a refinance for HMDA since it satisfies and replaces an existing obligation. My thinking is this is not a HMDA reportable loan since the purpose is for contruction purposes regardless of the extra collateral taken. However, I would like some other thoughts as well. Thanks.
Construction loans are not HMDA reportable. The issue appears to be whether the note being refinanced is actually for construction or not? The additional collateral does not appear to have any impact on the answer. It is not clear why the additional collateral was obtained. Or, why the loan is being refinanced. But if the loan is actually for construction purposes the transaction appears to be exempt.