IBA Compliance Connection

Your go to source for compliance!

We originate business loans secured by manufactured home communities, including both the land and the sites for the manufactured homes. There are at least five sites in each of these manufactured home communities, and in some cases, we also take the manufactured homes in the communities as collateral. To comply with the Home Mortgage Disclosure Act (HMDA), how should we report the “Manufactured Home Secured Property Type” and “Manufactured Home Land Property Interest” for these loans? We have been reporting “not applicable” for both fields but are unsure whether this is correct.

—

by

admin

We believe reporting “not applicable” for these two fields is correct if the manufactured home communities contain five or more sites.

The CFPB’s official interpretations for Regulation C (which implements HMDA) state that for both of the reporting requirements referenced in your question — “Manufactured Home Secured Property Type” and “Manufactured Home Land Property Interest” — you should enter “not applicable for a covered loan where the dwelling related to the property . . . is not a manufactured home.”

The CFPB’s official interpretations also state that a “manufactured home community that is a multifamily dwelling is not considered a manufactured home” for purposes of these two reporting requirements. Regulation C defines “multifamily dwelling” as a dwelling with “five or more individual dwelling units” (and the definition of “dwelling” includes manufactured home communities).

Because a manufactured home community with five or more sites is considered a “multifamily dwelling” and not a “manufactured home” for purposes of Regulation C’s “Manufactured Home Secured Property Type” and “Manufactured Home Land Property Interest” reporting requirements, entering “not applicable” for these fields is correct.

For resources related to our guidance, please see:

  • Regulation C, 12 CFR 1003.4(a)(29) (“A financial institution shall collect data regarding applications for covered loans that it receives, covered loans that it originates, and covered loans that it purchases for each calendar year. . . . The data collected shall include the following items: . . .(29) If the dwelling related to the property identified in paragraph (a)(9) of this section is a manufactured home and not a multifamily dwelling, whether the covered loan is, or in the case of an application would have been, secured by a manufactured home and land, or by a manufactured home and not land.”)
  • Regulation C, Official Interpretations, Paragraph 4(a)(29), Comment 2 (“A manufactured home community that is a multifamily dwelling is not considered a manufactured home for purposes of § 1003.4(a)(29).”)
  • Regulation C, Official Interpretations, Paragraph 4(a)(29), Comment 4 (“A financial institution reports that the requirement is not applicable for a covered loan where the dwelling related to the property identified in § 1003.4(a)(9) is not a manufactured home.”)
  • Regulation C, 12 CFR 1003.4(a)(30) ( “If the dwelling related to the property identified in paragraph (a)(9) of this section is a manufactured home and not a multifamily dwelling, whether the applicant or borrower:

(i) Owns the land on which it is or will be located or, in the case of an application, did or would have owned the land on which it would have been located, through a direct or indirect ownership interest; or

(ii) Leases or, in the case of an application, leases or would have leased the land through a paid or unpaid leasehold.”)

  • Regulation C, Official Interpretations, Paragraph 4(a)(30), Comment 4 (“A manufactured home community that is a multifamily dwelling is not considered a manufactured home for purposes of § 1003.4(a)(30).”)
  • Regulation C, Official Interpretations, Paragraph 4(a)(30), Comment 6 (“A financial institution reports that the requirement is not applicable for a covered loan where the dwelling related to the property identified in § 1003.4(a)(9) is not a manufactured home.”)
  • Regulation C, 12 CFR 1003.2(n) (“Multifamily dwelling means a dwelling, regardless of construction method, that contains five or more individual dwelling units.”)
  • Regulation C, 12 CFR 1003.2(f) (“Dwelling means a residential structure, whether or not attached to real property. The term includes but is not limited to a detached home, an individual condominium or cooperative unit, a manufactured home or other factory-built home, or a multifamily residential structure or community.”)
  • Regulation C, Official Interpretations, Paragraph 2(f), Comment 2 (“A dwelling also includes a multifamily residential structure or community such as an apartment, condominium, cooperative building or housing complex, or a manufactured home community. A loan related to a manufactured home community is secured by a dwelling for purposes of § 1003.2(f) even if it is not secured by any individual manufactured homes, but only by the land that constitutes the manufactured home community including sites for manufactured homes.”)
  • Regulation C, 12 CFR 1003.4(a)(31) (“The number of individual dwelling units related to the property securing the covered loan or, in the case of an application, proposed to secure the covered loan.”)
  • Regulation C, Official Interpretations, Paragraph 4(a)(31), Comment 2 (“For an application or covered loan secured by a manufactured home community, the financial institution should include in the number of individual dwelling units the total number of manufactured home sites that secure the loan and are available for occupancy, regardless of whether the sites are currently occupied or have manufactured homes currently attached. A financial institution may include in the number of individual dwelling units other units such as recreational vehicle pads, manager apartments, rental apartments, site-built homes or other rentable space that are ancillary to the operation of the secured property if it considers such units under its underwriting guidelines or the guidelines of an investor, or if it tracks the number of such units for its own internal purposes. For a loan secured by a single manufactured home that is or will be located in a manufactured home community, the financial institution should report one individual dwelling unit.”)
  • Regulation C, Official Interpretations, Paragraph 2(n), Comment 2 (“The definition of multifamily dwelling in § 1003.2(n) includes a dwelling, regardless of construction method, that contains five or more individual dwelling units. Covered loans secured by a multifamily dwelling are subject to additional reporting requirements under § 1003.4(a)(32), but are not subject to reporting requirements under § 1003.4(a)(4), (10)(iii), (23), (29), or (30).”)