Refinancing - Cash Out for Home Improvement. How should a lender code a dwelling-secured loan when the borrower uses the funds both to pay off an existing dwelling-secured loan and to make improvements to a dwelling? [Regulation C / HMDA]

Compliance > Regulation C - HMDA > FFIEC FAQs
Q:  Refinancing - Cash Out for Home Improvement.  How should a lender code a dwelling-secured loan when the borrower uses the funds both to pay off an existing dwelling-secured loan and to make improvements to a dwelling?
 
A:  A dwelling-secured loan that meets the definitions of both "home improvement loan" and "refinancing" should be coded as a "home improvement loan."  See comment 203.2(g)-5. The lender must code the loan as a "home improvement loan" even if the lender does not classify it in the lender's own records as a "home improvement loan." See 203.2(g)(1).
 

This can be found in FFIEC’s FAQs on HMDA-related questions, which can be found at:  http://www.ffiec.gov/hmda/faq.htm

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