When it comes to home improvement, any type of real estate improvement is what the HMDA calls a home improvement loan. If it's a one to four family home, it doesn't matter what you're improving as long as it's not personal property. This could include underground sprinklers, landscaping, a separate garage, or even a doctor adding a wing to their home. The regulations even give an example of a doctor who is going to add a wing to their home so that they can practice medicine from home.
Consumer home equity loans can now serve other purposes and still be covered, such as prequalifications and applications for a home purchase loan in pre-approval programs. It's important to note that if the loan is not secured by a home and is not classified on your books as a home improvement loan, it is not reportable by the HMDA. If the loan is for a home improvement, home purchase, or refinance, then that loan will be considered reportable. This includes making improvements to the entire facility, such as new central air, HVAC, or water.
If you're making improvements to the housing part, it's definitely a home improvement for the HMDA. The Mortgage Disclosure Act (HMDA), implemented by Regulation C, requires that financial institutions subject to the Act and Regulation (HMDA reporters) collect and report certain fields of data on applications, originations and purchases of “covered loans”. Because of these factors, some banks have found that developing staff with specialized HMDA competence improves HMDA compliance.
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