Home Mortgage Disclosure Act (HMDA)/Reg C

Are "fix and flip loans" reportable for HMDA purposes?

The commentary to Regulation C addresses the exclusion for such loans as long as the loan is for temporary financing not intended to be replaced by permanent financing. Here is a summary of the commentary regarding such loans:

Investor Renovate and Resell Loans - These loans are also excluded when the temporary financing is not intended to be replaced by permanent financing. The commentary provides an example using a nine-month expiration term on the temporary financing, but also make it clear that the determination is based on the lack of permanent financing expected not the fact that the loan term is for a short period of time.

Loan or line of credit to construct a dwelling for sale - A construction-only loan or line of credit is considered temporary financing and excluded if the loan or line of credit is extended to a person exclusively to construct a dwelling for sale.

Citation(s):§1003.3(c)(3); Commentary ¶3(c)(3)-1i-v