HMDA / CRA Data Collection
How to Correctly Identify and Report Loans
January 20, 2010
HMDA Data Collection
How to Correctly Identify and Report Loans
January 20, 2010
Purpose of Training –
To provide a full understanding of how to correctly identify a HMDA reportable loan.
II. To provide a full understanding of how to correctly identify a Non-HMDA reportable
but CRA reportable loan.
III. To provide a full understanding of how to correctly identity a “Community
Development Loan”.
IV. To provide a full understanding of how to correctly report the following;
I.
a.
b.
c.
d.
e.
HMDA applicable loans
Small Business Loans
Small Farm Loans
CRE – Commercial Real Estate Loans
Community Development Loans
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HMDA / CRA Reporting| 01/20/2010
Table of Contents –
I.
HMDA Purpose
1. Home Purchase
2. Home Improvement
3. Refinance
II.
Small Business Loans
1.
2.
III.
Small Farm Loans
1.
2.
III.
Agricultural Purpose
Secured by Farm land
CRE – Commercial Real Estate
1.
2.
IV.
Less than or equal to $1 million
NOT secured by Residential Real Estate
Secured by Commercial Real Estate
Over $1 million
Community Development Loans
1.
2.
3.
4.
Affordable Housing – Primarily for LMI individuals
Community Services – Primarily for LMI individuals
Economic Development
Revitalization or Stabilization of LMI census tracts or areas targeted by government
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Why and What For?
There are two Federal regulations that govern the collection and reporting of HMDA loans
and certain CRA loans;
 12 CFR 203; Regulation C; HMDA; Home Mortgage Disclosure Act
 12 CFR 228; Regulation BB; CRA; Community Reinvestment Act
The proper collection and reporting of loan data is “CRITICAL” because the government
uses the data for many purposes including the distribution of loan data throughout the
country, determination of loan trends, borrower characteristics and demographic data.
 Regulators can issue poor compliance ratings for non-compliance; and/or
 Civil Money Penalties for non-compliance
 Can you spell Cease and Desist? It is as bad as it sounds
 Significant risk – Reputation Risk, Compliance Risk, Monetary Risk (Penalties)
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Four Main Aspects That Lead To Success!
I.
Determine the loan purpose
a.
b.
II.
Determine the loan amount
a.
b.
III.
Dollar amount applied for
Dollar amount granted
Identity the borrower
a.
b.
IV.
Home Purchase, Home Improvement, Refinance
Small Business / Small Farm, Commercial Purpose, (CRE), Community Development
Individual / Business Entity
For Profit / Not For-Profit
Identity the subject property / security
a.
b.
c.
d.
e.
Residential Real Estate
Commercial Real Estate
Multifamily Housing – 5+ Properties
Mixed Use Property / Multiple Properties
Non Real Estate Secured
“The Golden Rule”
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HMDA Purpose!
To be reportable as a HMDA loan, the loan purpose must be for;
1.
Home Purchase
a.
b.
2.
Home Improvement
a.
b.
3.
Must be for the purpose of “Home Purchase”
Must be secured by a “Dwelling”
Any part of the proceeds used for “Home Improvement” purpose (renovate, rehabilitate, a
dwelling or the real property on which the dwelling exists)
May be secured or unsecured, *(different depending on Residential or Commercial loan)
*
Unsecured or non-real estate secured Home Improvement loans are only HMDA
reportable if the institution classifies them as such on internal systems. Classification
includes color-coding the files, using separate class or loan codes or call reporting
codes. Since FB does not separately classify HI loans, they are not HMDA reportable
unless secured by residential real estate, (dwelling or dwellings).
Refinance
a.
b.
Includes both Cash out and No Cash out
Must replace an existing lien with a new lien, (not necessarily the same dwelling)
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HMDA Purpose!
Hierarchy of Reporting
Home Purchase
Home Improvement
Refinance
Report “Home Purchase” first, “Home Improvement” second and “Refinance” third –

If a loan is both for Home Purchase and Home Improvement – Report as Home Purchase

If a loan is a Refinance to do Home Improvements – Report as Home Improvement

If loan is a Refinance for Cash out to purchase a second home – Report as Home Purchase

Includes both “Owner” and “Non-Owner” occupied properties
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Loans Exempt From HMDA Reporting –
I.
I.
I.
II.
III.
IV.
V.
I.
II.
Loans on unimproved land
 Unless the financing includes the construction of a dwelling and is permanent
Construction Only Loans and other Temporary Financings
 Includes builder / developer loans
Loans made or purchased in a fiduciary capacity
Purchase of an interest in a pool of mortgages, such as a participation
Purchase solely of loan servicing rights
Loans acquired as part of a merger
The acquisition of only a partial interest in a home purchase or home improvement
loan – Consortium or Third party Loan
 Unless the bank is the lead bank in the participation
Prequalification requests
Assumptions
In addition, do not report Lines or Letters of Credit
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HMDA LAR Information –
Application or Loan Information
Application or Loan number
(1)
1.
Loan
Type
Property
Type
Purpose
Owner
Occupancy
(3)
(4)
(5)
(6)
123456789
1/1/2010
1
1
1
1
234567890
1/2/2010
1
2
2
1
345678912
1/3/2010
1
3
3
2
Application # –

2.
Date
Application
Received.
(2)
Unique identifying number for the applications received.
Application Date –



The date on which the loan request is made by an applicant and received by the Bank
More specifically, the date on which the applicant has provided the Bank with enough
information to START processing a loan request
Must be verifiable and documented
 Not the LAF date
 May not be preceded by and other documented date in the loan file such as the Credit Report Date,
Appraisal Date, Flood Cert Date, Proposal or Commitment Date.
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HMDA LAR Information – (Continued)
It is imperative to determine up front whether or not a loan is HMDA reportable because you need certain information to
properly collect and report required data on the LAR. Must document the Month, Day and Year of the application date.
3.
Loan Type –
 Indicate the loan application type;
— Code 1
— Code 2
— Code 3
— Code 4
4.
Conventional, (any loan other than FHA, VA, FSA or RHS)
FHA insured
VA Guaranteed
FSA/RHS Loan
Property Type –
 Indicate the property type;
1 – 4 family dwelling (other than manufactured housing)
— Code 2 Manufactured housing / Mobile Homes
— Code 3 Multifamily dwelling (5+ residential properties) *
a. Use Code 1, not Code 3, for loans on individual condominium or cooperative units
b. If you cannot determine whether a loan or application relates to a manufactured home, use Code 1.
— Code 1
* 5+ residential refers to units.
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HMDA LAR Information – (Continued)
5.
Loan Purpose –
 Indicate the loan purpose;
— Code 1
Home Purchase
— Code 2 Home Improvement
— Code 3 Refinance
a. Do not report a refinancing if, under the loan agreement you were unconditionally obligated to
refinance the obligation, or you were obligated to refinance the obligation subject to conditions within
the borrower’s control
6.
Owner Occupancy –
 Indicate the type of occupancy;
—
—
—
Code 1
Owner Occupied as a principal dwelling
Code 2
Not Owner Occupied as a principal dwelling
Code 3
Not Applicable
a. For purchase loans, use Code 1 unless the loan documents or application indicate that the property
will not be occupied as a principal residence.
b. Use Code for second homes or vacation homes, as well as for rental properties.
c. Use Code 3 if the property to which the loan relates is a multifamily dwelling, (5 + units); is not
located in a metropolitan area; or is located in a metropolitan area in which your institution has
neither a home or branch office.
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HMDA LAR Information – (Continued)
Loan Amt. in ,000’s
PreApp.
(8)
(7)
7.
Loan Action
Property Location
Action
Type
(9)
Action Date
MSA / MD
(10)
(11)
St.
Code
(12)
CTY.
Code
(13)
Census
(14)
65
1
1
1/10/2010
25540
09
003
4
6
4
1.
0
2
549
1
3
1/11/2010
25540
09
003
4
0
0
6.
0
0
50
1
5
1/12/2010
25540
09
003
4
6
0
2.
0
2
Loan Amount –
 Enter the amount of the loan or application.
 Show the amount in thousands, rounding to the nearest thousand, (round $500 up to the next
$1,000) For example – a loan for $167,300 should be entered as 167 and one for $15,500 as
16;
a. For home purchase loan that you originated, enter the principal amount of the loan.
b. For home purchase loans that you purchased, enter the unpaid principal balance of the loan at the
time of the purchase.
c. For home improvement loan, enter the entire amount of the loan regardless of the amount used for
home improvement.
d. For refinance loans, enter the total amount of the new loan.
e. For a loan application that was denied or withdrawn, enter the amount applied for by the applicant.
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HMDA / CRA Reporting| 01/20/2010
HMDA LAR Information – (Continued)
8.
Request for Pre-Approval –
 Indicate whether the application or loan involved a request for pre-approval of a home
purchase loan;
—
—
—
9.
Code 1
Pre-Approval requested
Code 2
Pre-Approval not requested
Code 3
Not applicable
a. Enter Code 2 if the institution has a covered pre-approval program but the applicant does not request
pre-approval.
b. Enter Code 3 if your institution does not have a pre-approval program.
c. Enter Code 3 for applications for home improvement and refinancing and for purchased loans.
 Commercial Loans – always use Code 3 – Not Applicable
Type of Action Taken –
 Indicate the type of action taken on the loan application;
— Code 1
— Code 2
— Code 3
— Code 4
— Code 5
— Code 6
— Code 7
— Code 8
Loan originated
Application approved but not accepted
Application denied
Application withdrawn
File closed for incompleteness
Loan purchased by institution
Pre-Approval request denied
(not used in commercial lending)
Pre-Approval request approved but not accepted (not used in commercial lending)
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HMDA LAR Information – (Continued)
a. Use Code 1 for all originated loans.
b. For loans where a counter offer is made and accepted by the applicant, enter Code 1. For loans
where a counter offer is made and not accepted by the applicant or the applicant does not respond,
use Code 3.
c. Use Code 2 when the original loan request is approved but the applicant does not respond to a
written letter of commitment. Use code 2 if applicant withdraws the application after written
commitment provided. (DO NOT USE FOR PRE-APPROVAL REQUEST)
d. For loan applications where the applicant expressly withdraws the application prior to a written
commitment, use Code 4. (Do not use Code 4 if a request for pre-approval is withdrawn; Preapproval requests that are withdrawn are NOT HMDA REPORTABLE)
e. Use Code 5 if a written notice of incompleteness was sent to the applicant and the applicant did not
respond to the request within the time frame noted in the request. (Do not use Code 5 if a request
for pre-approval is incomplete; Pre-approval requests that are incomplete are NOT HMDA
REPORTABLE)
10. Date Action Taken –
 Enter the date on which the action was taken on the loan or application;
a. For loans originated, enter the settlement or closing date.
b. For purchased loans, enter the date the loan was purchased by the institution.
c. For applications and pre-approvals denied, applications and pre-approvals approved but not
accepted, and files closed for incompleteness, enter the date that the action was taken by the
institution or the date the notice was sent to the applicant.
d. For applications withdrawn, enter the date your received the applicant’s express withdrawal, or enter
the date shown on the notification from the applicant.
e. For pre-approvals that lead to a loan origination, enter the date of the origination.
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HMDA LAR Information – (Continued)
11. Property Location –
 Enter the MSA/MD (Metropolitan Statistical Area)
 Enter the State and County Codes
 Enter the Census Tract;
a. MSA/MD – 5 digit code
b. State Code – 2 digit code / County Code – 3 digit code
c. Census Tract – 6 digit code (xxxx.xx)
Applicant Information
A = Applicant CA = Co-Applicant
Ethnicity
Race
A
CA
Applicant
1
2
5
2
5
2
2
Sex
Co-Applicant
Gross
INC.
A
CA
5
1
2
125
5
8
1
5
250
5
3
2
1
95
Applicant Information –
Ethnicity, Race, Gender and Gross Income
 If the information is not provided by the applicant(s) in a face to face interview, the loan officer must
complete all fields by visual observation. Applies only to individuals not business entities.
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HMDA / CRA Reporting| 01/20/2010
HMDA LAR Information – (Continued)
12. Applicant / Co-Applicant Ethnicity –
 Indicate the ethnicity of the applicant and co-applicant;
—
—
—
—
—
Code 1
Code 2
Code 3
Code 4
Code 5
Hispanic or Latino
Non Hispanic or Latino
Information not provided in a mail or telephone application
Not Applicable (Non natural person and business entities)
No Co-Applicant
13. Applicant / Co-Applicant Race –
 Indicate the race of the applicant and co-applicant;
—
—
—
—
—
—
—
—
Code 1
Code 2
Code 3
Code 4
Code 5
Code 6
Code 7
Code 8
a.
b.
c.
American Indian or Alaskan native
Asian
Black or African American
Native Hawaiian or Other Pacific Islander
White
Information Not provided by Applicant in mail, internet or telephone application
Not Applicable (non-natural persons and business entities)
No Co-Applicant
If applicant selects more than one racial designation, enter all codes listed.
Use code 4 (for ethnicity) and code 7 (for race) for “Not Applicable only when the
applicant(s) are not natural persons or the information is not available.
If there is more than one co-applicant, provide the required information only for the first coapplicant listed. If there are no co-applicant(s), use code 5 (for ethnicity) and code 8 (for
race) for “no co-applicant” in the co-applicant column.
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HMDA LAR Information – (Continued)
14. Applicant / Co-Applicant Sex –
 Indicate the gender of the applicant and co-applicant;
—
—
—
—
—
Code 1
Male
Code 2
Female
Code 3
Information not provided in a mail, internet or telephone application
Code 4
Not Applicable
Code 5
No Co-Applicant
a. Use code 4 for “not applicable” only when the applicant or co-applicant is not a natural person or
when applicant or co-applicant information is not available.
b. If there is more than one co-applicant, provide the required information only for the first co-applicant
listed on the application form. If there are no co-applicants or co-borrowers, use code 5 for “no coapplicant” in the co-applicant column.
15. Income –
 Enter the gross annual income that your institution relied on in making the credit decision;
a.
b.
c.
d.
Round all dollar amounts to the nearest thousand, (round $500 up to the next $1,000).
For loans on multifamily dwellings, enter “N/A”.
If no income information is asked for or relied upon in making the credit decision, enter “N/A”
If the applicant or co-applicant is not a natural person (Commercial Loans made to an entity), enter
“N/A”
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HMDA / CRA Reporting| 01/20/2010
HMDA LAR Information – (Continued)
16. Type of Purchase –
 Enter the applicable code to indicate whether a loan that your institution originated or
purchased was then sold to a secondary market entity within the same calender year;
—
Code 0
Loan was originated or was not sold in the calendar covered by the LAR
— Code 1
Fannie Mae
— Code 2
Ginnie Mae
— Code 3
Freddie Mac
— Code 4
Farmer Mac
— Code 5
Private Securitization
— Code 6
Commercial Bank, Savings Bank or Savings Association
— Code 7
Life Insurance Company, Credit Union, Mortgage bank, or finance company
— Code 8
Affiliate Institution
— Code 9
Other type of Purchaser
a. Use Code 0 for applications that were denied, withdrawn or approved but not accepted by the
applicant; and for files closed incomplete.
b. Use Code 0 if you originated or purchased the loan and did not sell it during that same calendar
year and sell it in a succeeding year.
c. Use Code 2 if you conditionally assign a loan to Ginnie Mae in connection with a mortgage-backed
security transaction
d. Use Code 8 for loans sold to an institution affiliated with you, such as your subsidiary or a
subsidiary of your parent corporation.
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HMDA LAR Information – (Continued)
17. Reasons For Denial –
 Indicate the reasons for denial. This filed is optional. You may indicate up to three reasons.
Leave this column blank if the action taken on the application is not a denial;
Code 1
Debt – to – income ratio
— Code 2
Employment History
— Code 3
Credit History
— Code 4
Collateral
— Code 5
Insufficient cash (down-payment, closing costs)
— Code 6
Unverifiable Information
— Code 7
Credit Application Incomplete
— Code 8
Other
a. Use Code 0 for applications that were denied, withdrawn or approved but not accepted by the
applicant; and for files closed incomplete.
b. Use Code 0 if you originated or purchased the loan and did not sell it during that same calendar year
and sell it in a succeeding year.
c. Use Code 2 if you conditionally assign a loan to Ginnie Mae in connection with a mortgage-backed
security transaction
d. Use Code 8 for loans sold to an institution affiliated with you, such as your subsidiary or a subsidiary
of your parent corporation.
—
18. Rate Spread (HOEPA Loans only) –
 Enter “N/A” – This section is not applicable for Commercial loans. Only applicable if
Regulation Z applies.
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HMDA / CRA Reporting| 01/20/2010
HMDA LAR Information – (Continued)
19. HOEPA Status –
 Enter Code 2 – for “N/A”. Only applies to loans subject to Regulation Z.
20. Lien Status –
 Enter the lien status for loans originated and for applications not originated;
—
—
—
—
Code 1
Secured by first lien
Code 2
Secured by secondary or subordinate lien
Code 3
Not secured by a lien
Code 4
Not applicable, (purchased loan)
a. Use Codes 1 – 3 for loans that you originate, as well as for applications that do not result in an
origination, (applications that are approved but not accepted, denied, withdrawn, or closed
incomplete).
b. Use Code 4 for loans that you purchase.
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Mixed Use Properties and Multi-Purpose Loans –
I.
Mixed Use Property –
 A mixed use property is one that involves both “Residential” and “Commercial” real estate;
— Retail “Strip Mall” with multiple retail stores and residential rental apartments included in same structure.
— Residential single family or 1-4 family residence with business attached.
— Horse Farm with residential dwelling.
— Restaurant with residential rental or owner occupied residence above.
a. For a mixed use property where both a commercial and residential purpose is evident, the loan is
HMDA reportable if the total square footage used for residential purposes is greater than the square
footage of the commercial usage.
b. Where square footage is not available or is not conclusive in making a determination, use the gross
revenues derived from the residential use verses the revenues for retail purpose.
II.
Multi-Purpose Loan –
 A loan secured by commercial and or residential real estate for both a commercial and or
residential purpose;
— A refinance of a residential property to provide funds for home improvement.
— A refinance of a residential property to provide funds to purchase a business or investment property.
— A construction permanent loan to purchase and demolish a residential dwelling and construct a
commercial building.
— A construction permanent loan to convert an existing residence into a business property.
a. Remember the “Golden Rule”. If the purpose meets any of the three HMDA purpose tests, the loan is
HMDA reportable.
b. If the purpose is a commercial purpose and none of the three HMDA tests are positive, then the loan is
not HMDA reportable.
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HMDA Purpose Defined –
I.
Home Purchase –
 A loan secured by and made for the purpose of purchasing a dwelling; does not include a loan to purchase
property used primarily for agricultural purposes even if the property includes a dwelling (may include a loan
to purchase an apartment building made through a commercial lending department). The dwelling does not
have to be the same dwelling.
 A residential structure located in a State, the District of Columbia or Puerto Rico; includes an individual condo
unit, co-op unit, or mobile or manufactured home: refers to any dwelling not necessarily owned by the
borrower.
II.
Home Improvement Loan –
 A loan secured by a lien on a dwelling that is for the purpose, in whole or in part, of repairing, rehabilitating,
remodeling, or improving a dwelling or real property on which it is located (may include a loan to improve an
apartment building made through a commercial lending department); and
 A non-dwelling secured loan that is for the purpose, in whole or in part, of repairing, rehabilitating,
remodeling, or improving a dwelling or the real property on which it is located. IF CLASSIFED AS SUCH
III.
Refinance –
 A new obligation that satisfies and replaces an existing obligation by the same borrower in which both the
existing obligation and the new obligation are secured by liens on dwellings. Whether or not cash out occurs
is not relevant; the purpose of the refinance is not applicable; the lender need not have been the lender on
the existing obligation.
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Special Attention LAR Reporting Fields –
I.
Property Location –
Subject Property Securing Loan:
Address of the property to which the loan relates
Other Property Securing Loan:
Report the property being used as security in the census data.
a. Security as an “Abundance of Caution” – Business purpose loans that include a refinance of residential
property are HMDA reportable if the property is primary security or the FMV of the property exceeds 50%
of the loan proceeds when not primary.
II. Income –
III.
Borrower is an individual:
Report the borrowers’ income relied upon in making the credit
decision in the income field.
Borrower is an entity /
Multifamily - 5+ units:
Report N/A in the income field.
Government Monitoring –
If Borrower is an individual:
Report applicable codes
If borrower is an entity:
Report - “4 4 7 7 4 4”
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“Sometimes Yes, Sometimes No!”
There are a number of factors to consider, when determining if a loan is HMDA
reportable. Sometimes, the slightest change in circumstance can change the
determination. Remember to perform the “Golden Rule” test, account for exceptions and
then make your determination;
I.
Construction Loans –
a. Construction loans are generally not HMDA reportable unless the financing contains both the
construction only and permanent component.
b. Loans to purchase and quickly renovate a dwelling, “Splash and Dash”, where the proceeds
of the sale will repay the loan are HMDA reportable.
c. Construction loans to developers to build a residential development are not HMDA reportable
unless the financing contains both construction and permanent financing.
d. Construction loans to developers to build a residential development are HMDA reportable if
there is an existing dwelling on the property and the financing is not temporary.
 Example – Builder A takes a construction loan to develop a 12 acre parcel of land and
construct 12 residential homes on it – Loan is not HMDA Reportable
 Example – Builder A enters into an agreement with builder B to purchase a failed
development project. Builder A takes a construction loan to purchase the existing
parcel with 3 partially completed dwellings already on the property, to finish and
construct 9 additional homes – Loan is HMDA reportable.
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“Sometimes Yes, Sometimes No!”
II.
Mixed Use Property –
a.
b.
III.
The square footage and income or revenue tests for determining if a loan is HMDA
reportable only apply if the commercial purpose and residential purpose are contained in the
same structure.
If the residential purpose is fulfilled by a separate structure on the same parcel, then the
loan is HMDA reportable.
 Example – Commercial customer is purchasing a strip mall that contains 8 retail
businesses on the first floor and apartments on the second floor. The square footage of
the retail shops total of 10,000 sq feet and the total square footage of the apartments is
6,000 sq feet. Since the square footage of the retail space is greater than the residential
use, the loan is not HMDA reportable.
 Example – In the same example, an additional 2 family residence is located on the
property and is not attached to the other structure – Loan is HMDA reportable.
Home Improvement Loans –
a.
b.
Secured “Home Improvement” loans where any part of the proceeds are used to renovate,
rehabilitate or improve the dwelling or the real property the dwelling is located on, are HMDA
reportable.
Unsecured “Home Improvement” loans are only reportable if the institution classifies the
loan as a home improvement loan. Classification means – Classifying in separate category
on call report; coding by color, tag or any other method the loan file differently then other
loans; segregating the loan type from other loan files. For commercial loans, there is no
current segregation or classification, therefore, unsecured HI loans are not HMDA
reportable.
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HMDA / CRA Reporting| 01/20/2010
“Sometimes Yes, Sometimes No!”
IV.
Transitory Residences –
A loan to purchase, improve or refinance a “Transitory Residence” is not HMDA
reportable because the residence is considered temporary in nature and whose
occupants have principal residences elsewhere. Recreational vehicles such as boats or
campers are not dwellings for purposes of HMDA.
a. Transitory residences include the following;
1. Hotels, Motels, College Dormitories and Sorority / Fraternity Houses
2. Half way houses & Church shelters
3. Substance abuse homes and temporary residences for mental retardation
4. Nursing Homes, (if temporary)
5. Timeshare Purchases (not technically owned by the borrower)
 Example – Commercial loan to a church or non-profit entity to finance the purchase
of a group home as a temporary shelter for battered and wayward women – Not
HMDA Reportable.
b. If the residence is considered non temporary, then the loan is HMDA reportable;
1. Permanent Assisted living residences
2. Retirement communities and living residences
3. Church sponsored permanent housing
 Example – Commercial loan to a non-profit church or entity to finance the purchase
of an assisted living and retirement group home for the elderly as permanent housing
– HMDA reportable.
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HMDA / CRA Reporting| 01/20/2010
“Sometimes Yes, Sometimes No!”
V.
Modifications, Extensions and Consolidation Agreements –
 A loan modification or extension is not HMDA reportable unless a new note is
written that replaces or retires another note, or the purpose meets the HMDA
definitions and new money is extended.
Example – A loan with a 5 year term and 20 year amortization matures with $100,000
outstanding balance. The loan is secured by a second mortgage on a 7 unit apartment building.
a.
The loan is renewed and extended for another 5 years –

b.
The loan is renewed and increased to $150,000 and the original note is not being paid off –

c.
If the additional $50M will be used to either purchase or improve a dwelling then the entire $150,000 loan
would be HMD reportable as either a purchase or home improvement as dictated by the use of the
proceeds.
The original loan is replaced with a $150,000 loan and creates a new dwelling secured loan –

d.
The transaction is not HMDA reportable because the transaction is not to purchase of improve a
residential dwelling and the original dwelling secured loan I not being paid off.
Since the original loan is being satisfied / replaced and the original and new loans are both dwelling
secured loans, the loan would be HMDA reportable as a refinance regardless of the additional $50M.
The Application to replace and extend the loan to $150,000 is denied for DTI –

Since the original loan was to be satisfied / replaced, and the original loan and applied for loan would both
be both dwelling secured, the loan would be HMDA reportable as a denied refinance regardless of the
additional $50M.
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“Sometimes Yes, Sometimes No!”
VI.
Temporary Financing versus Short Term Financing –
 Temporary financing does not mean the same thing as short term financing. A
loan can be permanent financing but be short term, (6 Months). Similarly, a loan
could be temporary but have a term of 24 months. Temporary means that the
financing is meant to be taken out with another extension of credit and therefore
is temporary in nature. Permanent means simply – “The only financing the
borrower intends to take” that will not be paid from a new extension of credit.
a. A borrower applies for a construction-only loan to build a residential development with a
term of 18 months. The loan will have periodic interest only payments throughout the
construction phase and the entire principal balance will be paid at the lesser of; 1) The end
of the term; 2) The sale of individual units within the development –
 Since the application is for construction loan and not for the permanent financing phase of the project,
the application is considered temporary financing and therefore is not HMDA reportable, even though
in this case it is the only financing the borrower intends to take. It’s purpose is to build and sell units.
The individual sales of units would yield a HMDA reportable loan for the lending institution when the
units are sold.
b. A borrower applies for a loan to repave the parking lot of a multifamily unit. The loan will be
fully amortized over a period of 10 months with monthly payments of principal and interest
payments.
 This is a short term application that is permanent financing and therefore is HMD applicable as a home
improvement loan.
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CRA Data Collection
How to Correctly Identify and Report Loans
January 20, 2010
CRA Reporting –

Reporting of Commercial Loans on the CRA LAR is based on loan type and collateral
not loan purpose. In addition, unlike HMDA LAR collection you only report
originations.

The CRA LAR contains only the following fields;
1.
2.
3.
4.
5.
6.
7.
8.

Application Number
Loan Type (FED CRA Loan Purpose) / State CRA Loan Type
Loan Amount
Action Taken Type
Action Date
MSA/MD, State Code, County Code, Census Tract
Gross Revenue Code
Affiliate Lending Flag
Fed CRA Type / State CRA Loan Type –
a.
b.
Fed CRA; Based on loan type and type of security
State CRA; Based on loan type, purpose and security
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CRA Reporting –
Hierarchy of Reporting
HMDA
Small Business
Small Farm
CRE
Community Development
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Call Report Schedule RC – C Line Descriptions –
Line :
Call Report Schedule RC – C Description
1.
Loans Secured by Real Estate
1a.
Construction, land development and other land loans – Includes loans secured by real estate made to finance land development
preparatory to erecting new structures or the on-site construction of industrial, commercial, residential, or farm buildings. "Construction"
includes construction of new structures, additions or alterations to existing structures and the demolition of existing structures to make way
for new structures. Includes vacant land loans secure by real estate to acquire and develop undeveloped property. Excludes loans to finance
construction and land development not secured by real estate.
1b.
Secured by Farmland including farm residential and improvements – Farmland includes all land known to be used or usable for agricultural
purposes, such as crop and livestock production. Farmland includes grazing or pasture land. Excludes loans for farm property construction
and land development.
1c.
Secured by 1 – 4 Family Residential Real Estate
(1)
Revolving, Open End Loans and Extended Under Lines of Credit
(2)
a. Closed End Loans Secured by First Liens;
b. Closed End Loans Secured by Junior Liens
Secured by 1 – 4 Family Residential properties. Includes non-farm property containing 1 – 4 dwelling units and 5 or more dwelling units if
each is separated from other units by dividing walls extending from floor to roof. (Town-Houses). Includes condominium units, Mobile
homes and mixed use property where the primary use is residential
1d.
Secured by Multifamily 5+ Residential Properties – Includes non-farm 5 or more dwelling units in structures including apartment buildings
and apartment houses use primarily to accommodate households on a permanent basis.
1e.
Secured by Non Farm Non-Residential Properties – Secured by non-residential real estate including business and industrial properties,
hotels, churches, hospitals, educational and charitable institutions, dormitories, clubs, associations, lodges, “Homes” for aged persons or
orphans, golf courses, recreational facilities and similar properties
Non Real Estate Secured Commercial and Industrial Loans to US Addresses
4.
4a.
Loans made to businesses for commercial and industrial purpose, unsecured or non real estate recurred. Includes loans to finance capital
expenditures, lines or credit, working capital and loans to finance equipment or non-real estate construction and letters of credit.
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CRA Small Business Data Collection Grid –
Purp :
1.
1a.
CRA Small Business Collection / Loan Purpose: (Call Report Schedule RC-C Line Codes)
Loans Secured by Real Estate
Const:
1b.
Farm:
1c.
1 – 4 Fam. Res.:
Open /
Closed:
1d.
Multi-Family
5+
1e.
Non Farm /
Non Res.:
4.
SB HM CD NC
Interim Construction loan to a for-profit entity secured by residential real estate with a purpose
consistent with the definition of community development
Interim Construction loan to a for-profit entity secured by residential real estate without purpose
consistent with the definition of community development
X
X
Permanent loan to a for-profit entity secured by farmland with primary agricultural purpose
Permanent loan < 1Mill. to a for-profit entity for multifamily real estate (rental property) with a
primary purpose consistent with the definition of community development
Permanent loan > 1 Mill. to a for-profit entity for multifamily real estate with a primary purpose
consistent with the definition of community development
Permanent loan to a for-profit entity for multifamily real estate without a primary purpose consistent
with the definition of community development
Permanent loan in any amount to a non-profit entity for multifamily real estate with a primary
purpose consistent with the definition of community development
Permanent loan to a for-profit entity secured by nonresidential real estate and equal to or less than $
1million.
Permanent loan to a for-profit entity secured by nonresidential real estate and greater than $ 1
million with a primary purpose consistent with the definition of community development
Permanent loan to a for-profit entity secured by nonresidential real estate and greater than $ 1
million without a primary purpose consistent with the definition of community development
X
X
X
X
X
X
X
X
X
X
Non Real Estate Secured Commercial and Industrial Loans to US Addresses
Loan to a for-profit entity not secured by real estate and equal to or less than $ 1 million.
4a.
C & I Loans:
Loan to a for-profit entity not secured by real estate and greater than $ 1 million with a purpose
consistent with the definition of community development.
Loan to a for-profit entity not secured by real estate and greater than $ 1 million without a purpose
consistent with the definition of community development
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X
X
X
HMDA / CRA Reporting| 01/20/2010
CRA Reporting of Commercial Loan Types –
I.
HMDA Purpose
1. Permanent loan < $ 1 million to a “for-profit” entity for multifamily real estate (rental property)
with a primary purpose consistent with the definition of community development
2. Permanent loan > $ 1 million to a “for-profit” entity for multifamily real estate (rental property)
with a primary purpose consistent with the definition of community development *
3. Permanent loan to a “for-profit” entity for multifamily real estate without a primary purpose
consistent with the definition of community development
4. Permanent loan in any amount to a “non-profit” entity for multifamily real estate with a primary
purpose consistent with the definition of community development *
II.
Small Business Loans
Permanent loan to a “For-Profit” entity, < $ 1million secured by non-residential real estate
Permanent loan to a “For-Profit” entity, < $ 1 million and not secured by real estate
1.
2.
III.
Small Farm Loans
Permanent loan to a “For-Profit” entity secured by “Farmland” with primary agricultural
purpose
1.
III.
CRE – Commercial Real Estate
Permanent loan to a “For-Profit” entity secured by commercial real estate and > $ 1 million,
without a purpose consistent with the definition of “Community Development”
1.
*
Loan is both HMDA Reportable and Community Development
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HMDA / CRA Reporting| 01/20/2010
CRA Reporting of Commercial Loan Types – (Continued)
IV.
Community Development Loans
Interim Construction loan to a “for-profit” entity secured by residential real estate with a
purpose consistent with the definition of community development
Permanent loan > $ 1 million to a “for-profit” entity for multifamily real estate (rental property)
with a primary purpose consistent with the definition of community development *
Permanent loan in any amount to a “non-profit” entity for multifamily real estate with a
primary purpose consistent with the definition of community development *
Permanent loan to a “for-profit” entity secured by non-residential real estate > $ 1 million
with a primary purpose consistent with the definition of community development
Loan to a “for-profit” entity not secured by real estate and greater than $ 1 million with a
purpose consistent with the definition of community development.
1.
2.
3.
4.
5.
*
Loan is both HMDA Reportable and Community Development
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HMDA / CRA Reporting| 01/20/2010
CRA LAR Reporting Codes –
1.
Application # –

2.
Unique identifying number or loan number of the originated loan.
FED CRA Loan Type

–
Indicate the FED CRA purpose;
— Code 00 Not Fed CRA
(HMDA Reportable and or Community Development Loan)
— Code 01 Small Business Loan
— Code 02 Farm Loan
— Code 03 Other Business Loan
— Code 09 Other Loan Data
2a.
(Business purpose, letters of credit, construction loans)
State CRA Loan Type –

Indicate the State CRA loan type;
—
—
—
—
—
—
—
—
—
—
Code 01
Code 02
Code 03
Code 04
Code 05
Code 06
Code 07
Code 08
Code 09
Code 10
Residential 1 – 4 Family
Residential 5 +
Housing Rehab
Home Improvement
Small Business
Farm Loan
Community Development
Commercial Loan
Consumer Loan
All Other
(Not Used)
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CRA LAR Reporting Codes –
3.
Loan Amount –


4.
Action Taken –

5.
Use Code 1 – Loan Originated.
Action Taken Date –

6.
Enter the amount of the loan or application.
Show the amount in thousands, rounding to the nearest thousand, (round $500 up to the
next $1,000) For example – a loan for $167,300 should be entered as 167 and one for
$15,500 as 16.
The origination date of the loan.
Property Location –
 Enter the MSA/MD (Metropolitan Statistical Area)
 Enter the State and County Codes
 Enter the Census Tract;
a. MSA/MD – 5 digit code
b. State Code – 2 digit code / County Code – 3 digit code
c. Census Tract – 6 digit code (xxxx.xx)
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HMDA / CRA Reporting| 01/20/2010
CRA LAR Reporting Codes –
7.
Gross Annual Revenue Code –
 Enter the gross annual revenue code for the business entity;
—
—
—
—
8.
Code 01 Less than or equal to $ 1 Million
Code 02 Over $ 1 Million
Code 03 Revenue information was not gathered or considered in the credit decision
Code 04 N/A
a. Round all dollar amounts to the nearest thousand, (round $500 up to the next $1,000).
b. If no income information is asked for or relied upon in making the credit decision, enter Code 3
c. If the applicant or co-applicant is a natural person (Commercial Loans made to an individual), enter
“N/A”
Affiliate Lending Flag –
 Enter Code 01 – No affiliate
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HMDA / CRA Reporting| 01/20/2010
CRA Data Collection Worksheet –

Must complete a worksheet for each loan whether or not originated.
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HMDA / CRA Reporting| 01/20/2010
HMDA Data Collection Worksheet –

If loan is HMDA reportable, must complete a HMDA Data worksheet
I.
If Section J of the CRA Data Collection
sheet indicates that the loan is HMDA
reportable as indicated by a check mark in
either box “01”, “02” or “03”, then Section E
box “00” must be checked.
II.
If box “00” in section E of the CRA data
collection sheet indicates the loan is HMDA
reportable, then HMDA Data Collection
worksheet must be completed.
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HMDA / CRA Reporting| 01/20/2010
FED CRA Code Descriptions –
I.
FED CRA Loan Type –
Code:
Explanation:
00
Not FED CRA – Loans secured by 5+ Family real estate with CDL purpose are both HMDA reportable and Community
Development loans.
HMDA – Loan must be reported on the HMDA register.
COMMUNITY DEVELOPMENT LOAN – In excess of $ 1 mill; Purpose consistent with definition of Community Development.
01
SMALL BUSINESS LOAN - $1 Million or Less. Includes Loans and Lines of Credit, Equipment, Commercial Real Estate,
Auto or Truck loan to a business or to individual for business purpose. No houses or apartments as collateral.
(LETTERS OF CREDIT are reported as 09)
02
FARM LOAN - Loan amount is $500,000 or Less. Collateral is farmland.
03
OTHER BUSINESS LOAN - Loan amount is $1Million or Less. Collateral is residential property (houses or apartments)
09
04
HOME EQUITY LOAN - Includes Equity Line, reverse mortgages, and any other Home Equity Loan that is NOT reported on HMDA
05
MOTOR VEHICLE LOAN - Includes New Car, Used Car, Motor Home, Trailers, and Boats for CONSUMERS
06
CREDIT CARD – for a bona-fide credit card. Overdraft lines, even if they come with a Debit Card, are Type 08.
07
OTHER SECURED – For any consumer loan that does not fit any other category and we have collateral
08
OTHER UNSECURED – Overdraft Lines are reported here. ALSO any other Unsecured loan for consumer purpose.
OTHER LOAN DATA – Business purpose loans and Construction Loans over $1 Million; Letters of Credit; construction loans under
$1 Million that are NOT Community Development.
*
Codes 04 – 08 are not used. They pertain to consumer lending.
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HMDA / CRA Reporting| 01/20/2010
State CRA Code Descriptions –
II.
State CRA Loan Type –
Code:
Explanation:
01
Residential 1 – 4 – Residential 1-4 family dwellings
02
Residential 5 + -- Multifamily housing units, apartments
03
Housing Rehab – N/A (Used for special purpose Federally approved Housing Rehabilitation projects)
04
Home Improvement – Not used in Commercial lending, Consumer Lending field
05
Small Business Loan – Loans NOT secured by residential real estate in the amount of $1 million or less.
06
Farm Loan – Made to an agricultural entity secured by farmland < $500,000
07
Community Development – Specific purpose must benefit predominately LMI individuals and the loan cannot be
reportable in any other category unless 5+ residential properties.
08
Commercial Loan – Commercial Loans that are not small business loans, and or not secured by 1 – 4 family or 5+
Residential Real Estate.
09
Consumer Loan – N/A, Not used for commercial loans. Consumer lending field
10
All Other – N/A NOT USED
*
Codes 08 – 09 are not used. They pertain to consumer lending.
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HMDA / CRA Reporting| 01/20/2010
Miscellaneous Descriptions –
III.
Data Sheet Sections –
E:
Explanation:
00
Not FED CRA – HMDA Reportable Loan and or Community Development Loan
01
Small Business Loan – Report only loans listed on Schedule RC-C lines 1e and 4a, that are $1 million or less
02
Farm Loan – Loans to small farms including agricultural or equestrian purposes where the collateral is farm land
03
Other Business Loan – Report loans in amounts of $ 1 million or less where the collateral is residential property
ANDNOT HMDA REPORTABLE
04 – 08
NOT USED – Consumer Loan Codes
09
Business Purpose Loans not reportable elsewhere in an amount in excess of $1 million, construction loans over,
equal or less than $ 1million, including construction loans and letters of credit and loans under $1 million that are
NOT Community Development Loans
E:
Explanation: (Continued)
01, 02, 03, 09
Report address of the main business facility or where the loan proceeds will be used such as a branch
office, new location,…
Comm. Development
5+ Properties:
Reporting Order:
Report address where the community benefit will take place such as project location or agency’s
address.
5+ Properties that have the primary purpose of LMI benefit are both HMDA and CDL reportable. Use %
or # of rental units to determine primary CDL purpose. LMI benefit must be > than non-LMI.
A loan is HMDA reportable first, Small Business reportable second, CRE reportable third and CDL
reportable last.
For Profit Entity:
CDL loans to for profit entities are only reportable in amounts > than $1 Mill.
Non-Profit Entity:
CDL loans to non-profit entities are reportable in any amount if not already reportable as Small Business
or CRE or HMDA excluding 5+ LMI properties as indicated below in section “D”.
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HMDA / CRA Reporting| 01/20/2010
Miscellaneous Descriptions –
III.
Data Sheet Sections –
G:
Connecticut EZ-Zone Census Tracts If Applicable:
BRIST
4061, Portions of 4057.00, 4058.00 – *
SOUTH
Portions of; 4306.01, 4306.02, 4302.01 – *
PLAIN
Portions of 4205.00 – *
NBRIT
Portions of 4166.00, 4159.00, 4171.00, 4155.00, 4153.00 *
*
Enterprise Zones, (EZ) do not have the same boundaries that Census Tracts do. A census tract may
contain only a portion of an EZ zone or vice versa. you must check street address location against
Census Maps to determine if the property is located in a designated EZ-Zone.
H / I:
Geo-Code Information and Property Location:
HMDA
If the loan is secured by the subject property, report the property to which the loan relates.
HMDA
If the loan is secured by another property, report the property being used as security.
Commercial
Commercial Purpose Non-HMDA loans – Property Location follows where the proceeds are used
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HMDA / CRA Reporting| 01/20/2010
Internal Process –
1.
Responsibility of ALL Personnel –
 It is the responsibility of all personnel to ensure that each loan application is properly
identified and coded correctly on both the CRA and HMDA LAR if applicable.
 Process to include dual review to verify the integrity of data.
 Use the following steps to ensure compliance;
— Step 1
— Step 2
— Step 3
— Step 4
— Step 5
— Step 6
— Step 7
— Step 8
— Step 9
— Step 10
— Step 11
Identify the loan request; document the application date. *
Determine the applicability of HMDA / Community Development
Complete the CRA Data collection sheet and HMDA collection sheet if applicable
Update the CRA and HMDA Data sheets as applicable throughout the processing of the loan
HMDA Reportable loans must be tracked and data recorded on all originated and nonoriginated applications
CRA only loans only need to track originations
Internal Loan documentation is critical
CLA’s responsible for verification of data from data collection sheets
Commercial Servicing and Review Administrator responsible for input and second verification of
data fields on CRA and HMDA LAR.
Quarterly Scrub performed on all reported loans and sample of non-reported loans.
Quarterly tie out of aggregate loan totals from call report schedule RC-C to trial balance reports.
 Remember the “Golden Rule” ??
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HMDA / CRA Reporting| 01/20/2010
Four Main Aspects That Lead To Success!
I.
Determine the loan purpose
a.
b.
II.
Determine the loan amount
a.
b.
III.
Dollar amount applied for
Dollar amount granted
Identity the borrower
a.
b.
IV.
Home Purchase, Home Improvement, Refinance
Small Business / Small Farm, Commercial Purpose, (CRE), Community Development
Individual / Business Entity
For Profit / Not For-Profit
Identity the subject property / security
a.
b.
c.
d.
e.
Residential Real Estate
Commercial Real Estate
Multifamily Housing – 5+ Properties
Mixed Use Property / Multiple Properties
Non Real Estate Secured
“The Golden Rule”
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HMDA / CRA Reporting| 01/20/2010
Document, Document, Document……..
I.
Documentation is key to success –
a.
b.
c.
d.
e.
II.
Watch your Dates –
a.
b.
c.
III.
Can’t have application date of 3/1/10 in the file if the credit report date is 2/20/10!
When an applicant withdraws a loan request, document it I writing
For files closed incomplete, document your efforts to obtain missing information
Community Development Loans –
a.
b.
IV.
Include full description of purpose and collateral in loan write-ups
Must document required information for non-originated HMDA applicable loans
Provide specific Community Development purpose when appropriate
Update and verify Data Collection sheets often during the processing of the request
Verify final entries on Data Collection Sheets after loan consummation
Provide specific Community Development purpose in write-up
Provide information on what target group receives benefit of loan (LMI)
Community Development Service –
a.
b.
c.
Determine if donation is CRA qualified before you authorize it
Stipulate that donation must be used for CRA qualified purpose when made
Obtain purpose letter or letter of intent
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HMDA / CRA Reporting| 01/20/2010