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We have a business loan for $900,000, secured by several 4 – 6 unit residential properties. How do we accurately report this loan on the HMDA Loan Application Register (LAR)? – IBA Compliance Connection

IBA Compliance Connection

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We have a business loan for $900,000, secured by several 4 – 6 unit residential properties. How do we accurately report this loan on the HMDA Loan Application Register (LAR)?

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The Official Comments for Regulation C provide two options for reporting a loan that is secured by multiple properties. One option is to report the loan under a single LAR entry, using the location of just one of the properties securing the loan. The second option is to report the loan under multiple LAR entries for each of the properties securing the loan and allocating the loan amount among the different entries.

 For resources related to our guidance, please see:

  • Regulation C, Official Interpretations, 12 CFR 1003, Paragraph 4(a)(9), Comment 2 (“Property Location — Multiple Properties (Home Purchase/Refinance of Home Purchase). For a home purchase loan, an institution reports the property taken as security. If an institution takes more than one property as security, the institution reports the location of the property being purchased if there is just one. If the loan is to purchase multiple properties and is secured by multiple properties, the institution reports the location of one of the properties or reports the loan using multiple entries on its HMDA/LAR (with unique identifiers) and allocating the loan amount among the properties.”)