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We made a loan secured by a 10-lot mobile home park. There are no structures on the park, it is pads only. We came across this loan during a CRA audit as it was reported on line 1.e.2 of the call report but we did not report this loan on the CRA LAR. We are seeking an opinion on how this loan should be coded for reporting on the call report so that we can ensure correct coding for the call report and CRA.
The LOB responsible for coding loans is stating that all loans secured by mobile home parks are always coded as class code E1 (commercial mtg- non-owner occupied real estate), collateral code L1 (1st lien on improved land – parks (RV, MH, etc) established / already developed) which puts them on line 1.e.2 of our call report. We have found support that this is the proper coding for these loans, but nothing after the HMDA rules changed in 2018.
The CRA Department wants to rely on the call report codes to ensure the accuracy of their LAR. It is our understanding that loans reported on line 1.e.2 of the call report are considered small business loans based on call report instructions and should be reported on the LAR. This loan does not seem to fit “nonfarm non-residential real estate” which is why it was excluded.
Our HMDA Department would have reported this loan on the HMDA LAR if it had been a purchase, refinance, or home improvement.I know when HMDA was updated in 2018 the definition of dwelling was updated to include a manufactured home community even if it is only secured by the sites. Using HMDA rules, we could conclude that perhaps this should be coded under 1D for mutifamily, although the call report definitions do not appear to be as clear, as these are not “structures”. We have not been able to find clear support as to whether the change in the definition under HMDA also changed the way these loans are reported on the call report. Also, in looking at the call report definitions, we see that 1D excludes loans “secured by vacant lots in established residential sections or in areas set aside primarily for multifamily residential properties” to be reported on RC-C Part 1 item 1.a.(2). But we aren’t really sure these would be considered “vacant lots”.
If there is an available source or citation that would give us confirmation on the proper coding to use, we would appreciate that direction.
This is a great question. While I work extensively with HMDA and CRA. I do not work extensively with call reports.
I am not aware of the change in the definition under HMDA impacting the way these loans are reported on the call report.
I will encourage CMG members and others utilizing our Forums to respond to this question.
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