[TheBank]

We made a commercial loan to a business to construct a spec home. The loan was exclusively to construct the home and was excluded from the HMDA LAR. The construction was completed by maturity. At maturity we renewed/refinanced the loan to a new loan to give the builder more time to sell. Is this loan be HMDA reportable? If yes, would the loan purpose code be 1 purchase since the home was new construction and this new loan is the loan to “permanently finance” the home after completion? Or would the loan purpose code be 31 refinance since the construction loan was refinanced?

Seems like it should be code 1 purchase to be consistent with how this loan would have been coded had the initial loan been a consumer’s loan to construct a dwelling, then refinanced to amortize out the principal in a new note for permanent financing. A consumer’s refinanced loan would have been coded 1 purchase according to the commentary of the purchase definition it seems.

[Author]

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