Reply To: HMDA – Loan Purpose – 1x Close – Replace Lender


From the details provided the transaction sounds more like a refinance than a purchase loan. Regulation C defines a refinance as a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower. It sounds like your construction-permanent loan loan was replaced by a purchase-construction loan from another lender. In the situation where a permanent financing loan replaces a construction loan the transaction is reported as a purchase loan.