Loan is being refinanced and secured by a business/rental property (beauty shop and apartment). Question is whether a mixed-use property refinance is HMDA reportable?
Found the following clarifications in 2010 HMDA Getting It Right:
Purchases. Mixed-use property. A dwellingsecured loan to purchase property used primarily for residential purposes (for example, an apartment building containing a convenience store) is a home purchase loan. An institution may use any reasonable standard to
determine the primary use of the property, such as by square footage or by the income generated. An institution may select the standard to apply on a case-by-case basis.
Home Improvements. Mixed-use property. A loan to improve property used for residential and commercial purposes (for example, a building containing apartment units and retail space) is a home improvement loan if the loan proceeds are used primarily to improve the residential portion of the property.
Does the principal of “reasonable standard to determine primary use” still apply to refinances?
I’m thinking it would because it would have been applicable if the loan being refinanced was originally a HMDA-reportable loan by that standard.
Your analysis, as always, is completely accurate. Regulation C, the Commentary and the instructions for completing the form do not address mixed use property and refinances. I agree that using the square footage/rental test is appropriate, but always open to speculations since it is not specifically addressed.