[TheBank]

Is a consumer purpose loan to purchase a manufactured home (MH) to be the borrower’s residence that will be secured by the land only and not the manufactured home HMDA reportable? At first I thought this loan would not be HMDA reportable due to the collateral being land only, but then I remembered that the commentary to the dwelling definition includes MH communities as HMDA reportable even if no MH is taken as collateral. While this is not the exact same situation, it is similar, causing me to question whether or not the application is HMDA reportable.

[benef005]

The specific part of the commentary you reference is 12 CFR § 1003.2(f)-2, “…A loan related to a manufactured home community is secured by a dwelling for purposes of § 1003.2(f) even if it is not secured by any individual manufactured homes, but only by the land that constitutes the manufactured home community including sites for manufactured homes…”

Unless the land you have mentioned is a manufactured home park/community, I believe you are describing a land secured loan where the proceeds are being used to purchase a manufactured home. Since the no dwelling is the loan, the loan would not be reportable.

[rcooper]

Based on the information below I would say that it is reportable.

1003.2:
(j) Home purchase loan means a closed-end mortgage loan or an open-end line of credit that is for the purpose, in whole or in part, of purchasing a dwelling

(f) Dwelling means a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory-built home, or a multifamily residential structure or community.

1003.3:
Paragraph 3(c)(2)
1. Loan or line of credit secured by a lien on unimproved land. Section 1003.3(c)(2) provides that a closed-end mortgage loan or an open-end line of credit secured by a lien on unimproved land is an excluded transaction. A loan or line of credit is secured by a lien on unimproved land if the loan or line of credit is secured by vacant or unimproved property, unless the institution knows, based on information that it receives from the applicant or borrower at the time the application is received or the credit decision is made, that the proceeds of that loan or credit line will be used within two years after closing or account opening to construct a dwelling on, or to purchase a dwelling to be placed on, the land. A loan or line of credit that is not excludable under § 1003.3(c)(2) nevertheless may be excluded, for example, as temporary financing under § 1003.3(c)(3).

[jholzknecht]

You can read a lot of Commentary that leads to the conclusion that the transaction is exempt, but the single sentence in Paragraph 3(c)(2) chinches it – the transaction is reportable.

[jholzknecht]

This is an interesting post. Thanks to The Bank for submitting the question, thanks to benefoos for clarifying the manufactured home park community issue, and thanks to Robin for solving the puzzle.

[Author]

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