[pparks]

We had a couple loans that showed up on our CRA LR that I believe are more HMDA-related, but then may fall off due to them possibly being considered transitional housing. What are everyone’s thoughts/feedback? Which LAR/LR, if any, would it belong?

[jholzknecht]

This will be an interesting conversation. We need to determine who is borrowing the money, who owns the mobile homes, and if the mobile homes are even considered dwellings.

Let’s start by gathering some information. Your topic is mobile homes to house workers. Who is borrowing the money – the employee, the employer or a third party? Are the mobile homes actually manufactured homes built according the HUD’s standards after June 15, 1976?

[jholzknecht]

This will be an interesting conversation. We need to determine who is borrowing the money, who owns the mobile homes, and if the mobile homes are even considered dwellings.

Let’s start by gathering some information. Your topic is mobile homes to house workers. Who is borrowing the money – the employee, the employer or a third party? Are the mobile homes actually manufactured homes built according the HUD’s standards after June 15, 1976?

[pparks]

The borrowing entity is that of the employer. The mobile homes are new (2022), so I believe they will be built according to HUD standards. The loans are also secured by the mobile homes themselves.

[jholzknecht]

For purposes of HMDA, a dwelling is a residential structure. The definition of a dwelling is not limited to the principal dwelling or other residence of the applicant or borrower. A dwelling could include an investment property or non-owner occupied properties. Transitional residences are not considered dwellings. A mobile home is no more likely to be a transitional dwelling than is an apartment building. If the employees are long-term residents then the mobile homes are likely to be dwellings. If the employees are only in the mobile homes for a few days then they are less likely to be dwellings.

For purposes of CRA, covered institutions must collect data for small business and small farm loans and for HMDA-reportable mortgage loans. Small business loans are defined as those whose original amounts are $1 million or less and that were reported on the institution’s Call Report as either “Loans secured by nonfarm or nonresidential real estate” or “Commercial and industrial loans.” Small farm loans are defined as those whose original amounts are $500,000 or less and were reported as either “Loans to finance agricultural production and other loans to farmers” or “Loans secured by farmland.” Depending on the amount of the loan and the Call Report categorization the loans maybe CRA reportable.

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