land had been burned by a wildfire, and the policy is purchased no later than 60 days after the wildfirecontainment date. Here again, the waiting period is shortened to one day. HMDA. Q: We have a loan to purchase an adult foster care residential home that has five bedrooms (this is how the appraisal describes it). There are six residents who will live in the house with one common area. From what we understand, this is permanent housing for the residents. For the HMDA field “Total Units,” do we report that as five units or one? Also, do we report it as “Multifamily?” A: This property should be reported as one unit and not as a multifamily dwelling. RESPA. Q: Is it accurate to state that mortgages taken on residential properties, such as the business owner’s primary or secondary home, that are loans for business, agricultural or commercial purposes are exempt from RESPA? Also, are one- to four-family rental properties exempt from RESPA? The loan would be considered a business purpose for purchasing or refinancing for updating/ repairs to the properties. I have been reading mixed information regarding the treatment of rental properties as covered by RESPA and being exempt. A: Generally, the loan purpose determines exemption, not the collateral by itself. RESPA exempts loans that are primarily for business or commercial purposes and relies on the definitions and guidance in Regulation Z for making this determination. Credit extended for some business or agricultural purpose (e.g., working/operating capital, acquiring some business/ agricultural equipment or inventory, etc.) that is secured by a one- to four-family dwelling is exempt from RESPA. Credit extended to acquire, improve or maintain rental property (regardless of the number of housing units) that is not owner-occupied is deemed to be for business purposes and would not be covered under RESPA. If the owner occupies one unit (or will within the coming year), then coverage depends on the total number of units for credit extended to acquire, improve or maintain rental property. Such credit extended to acquire the rental property is deemed to be for business purposes if it contains more than two housing units. Credit extended to improve or maintain the rental property is deemed to be for business purposes if it contains more than four housing units. (406) 604-4540 NeighborWorks Montana and our network of partners across the state provide homebuyer education and counseling, creating successful, mortgage-ready homebuyers. Reach out today to find out how we can help your buyers be the most successful homebuyers possible! nwmt.org info@nwmt.org 38697 Partner with us for: • Loan participation purchases and sales* • Bank stock financing • Bank executive and employee financing *We do not reparticipate loans. Craig McCandless Call me at 406.850.3790 Based in Billings, Mont. Serving Montana, Wyoming and Idaho Our Mission Is to Help You Succeed Community Banker 27
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