HMDA Reporting and Multiple Properties

Issue/Inquiry

A loan made by the Bank is secured by multiple properties. Does the Bank report on the Home Mortgage Disclosure Act (“HMDA”) Loan Application Register (“LAR”) the units associated with one of the properties or all of the properties?

Response Summary

When multiple properties secure a loan, a financial institution will report some information pertaining to one of the properties as well as information that pertains to the covered loan or application as a whole. Among the information that is reported for the loan as a whole is the total number of units for all of the properties securing the loan.

Response Detail

Under Regulation C, which implements HMDA, a financial institution is required to report on the HMDA LAR the information about the location of the property securing the loan or application, including the following:

• Property address
• If the property is located in a Metropolitan Statistical Area (“MSA”) or Metropolitan Division (“MD”) in which the institution has a home or branch office, or if the institution is required to report small business, small farm, or community development lending for Community Reinvestment Act (“CRA”) purposes, the location of the property by state, county, and census tract. 12 CFR 1003.4(a)(9).

If more than one property is taken or proposed to be taken as security for a single covered loan, the Bank will report the covered loan or application as a single entry on the HMDA LAR and provide the information for one of the properties taken as security that contains a dwelling. This means that the property address and related information will be for the one property selected.

The Bank will also report certain related information for the property selected, including:

• Whether the construction method is built on-site or a manufactured home
• Whether the property is a principal residence, second home, or investment property
• The lien status (first or subordinate)
• If a manufactured home, whether the loan is secured by the manufactured home and land, or by just the manufactured home
• If a manufactured home, whether the borrower or applicant owns or leases the land on which the manufactured home is located. 12 CFR 1003.4(a)(5), (6), (14), (29), (30).

Otherwise, the Bank reports the information applicable to the covered loan or application as a whole.  Official Interpretations, 1003.4(a)(9) – 2. 

Among the information that must be reported for the covered loan or application as a whole is the number of individual dwelling units related to the properties securing or proposed to secure the loan. 12 CFR 1003.4(a)(31).

This means that if a loan is applied for that would be secured by properties A, B, and C, each of which has four dwelling units, then the Bank will choose one of those properties and report the address and related information for that property. However, for the data point related to the number of units, the Bank will report 12 units rather than four units since that is the total number of dwelling units securing the loan.

This response is for informational purposes only and is not intended for legal guidance.

This entry was posted on Monday, March 23rd, 2020 at 9:16 am.