Home Mortgage Disclosure (Regulation C)

CONSUMER FINANCIAL PROTECTION BUREAU | MAY 2020

OMB CONTROL NO. 3170-0008

Home Mortgage

Disclosure (Regulation C)

Small Entity Compliance Guide

1 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Version Log

The Bureau updates this guide on a periodic basis. Below is a version log noting the history of

this document and its updates:

Date Version Summary of Changes

May 26, 2020 5 Updates to incorporate the content of the 2020 HMDA Thresholds

Final Rule issued on April 16, 2020, including:

• Institutional coverage and the uniform loan-vo lume threshold for

closed-end mortgage loans and open-end lines of credit

(Sections 2.1, 3.1, and 9.1)

• Tran sactional coverage for clo sed -end mortgage loans and

open-end lines of credit (Sections 2.2, 4.1.1, 4.1.2, and 9.1)

Updates to incorporate the

Bureau’s Statement on Supervisory and

Enforcement Practices Regarding Quarterly Reporting Under the

Home Mortgage Disclosure Act (Sections 2.6, and 6.2)

Miscellaneous administrative changes in various sections.

January 23, 2020 4.0 Updates to incorporate the content of the final rule issued on October 10,

2019, including:

• Effective date (Section 2)

• Institutional coverage for open -end lines o f credit (Sectio ns 2.1,

3.1, 3.1.1, 3.1.2, 9.1)

• Transactional coverage for open-end lines of credit (Sections

2.2, 4.1.2, 4.3, 4.3.2)

• Partial exemptions (Sections 4.3, 4.3.1, 8.5)

• Non-universal loan identifier (Sections 5.2)

Information about the Bureau’s policy guidance on disclosure of loan-

level HMDA data (Section 2.7).

Deletes text related to 2017 institutional coverage because it is no longer

in effect (Section 2.1, 2.3, 2.5, 5.1.1, 9.1).

Deletes text regarding the collection of race, ethnicity, and sex for

applications taken in 2017 (Section 2.3, 5.1).

2 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Deletes text related to Appendix A of Regulation C because it was

removed from Reg ulation C in 2019 (Section 2.5).

Miscellaneous administrative changes in various sections.

October 2018 3.0 Updates to reflect Section 104(a) of the Economic Growth, Regulatory

Relief, and Consumer Protection Act (2018 Act) and the interpretive and

procedural rule issued on August 31, 2018 (2018 HMDA Rule), including:

• General information about Section 104(a) of the 2018 Act and

the 2018 HMDA Rule (Section 1)

• Key changes and effective date of Section 104(a) of the 2018

Act (Sectio ns 2.1, 2.3, and 4.3)

• Institutions eligible to rely upon the partial exemptions

created by Section 104(a) of the 2018 Act (Section 4.3.1)

• Loan-volume thresholds for the partial exemptions (Section

4.3.2)

• Collecting, recording, and reporting data points if a partial

exemption applies (Sections 4.3.3)

• Reporting a non-universal loan identifier if a partial exemption

applies (Section 5.2)

• Reporting other data points affected by the partial exemptions

(Sections 5.4, 5.9, 5.11, 5.12, 5.16, 5.17, and 5.19 through

5.30)

Additional information about which transactions a financial institution

must count when d etermining if a loan-volume threshold has been met

(Section 4.1.2).

Revisions to the portion of the table describing the loan amount reported

for a counteroffer for an amount different from the amount for which the

applicant applied, if the applicant did not accept or failed to respond.

Also, revisions to the portion of the same table describing the loan

amount reported for an Application that was denied, closed for

incompleteness, or withdrawn (Section 5.8).

Miscellaneous administrative changes in various sections.

October 2017 2.0 Updates to incorporate the content of the final rule issued on August

24, 2017, including changes and clarification regarding:

• Institutional coverage and the uniform loan-vo lume threshold for

open-end lines of credit (Sections 2.1, 3.2, and 9.1)

• Transactional coverage for open-end lines o f credit (Sections

2.2, 4.1.2, and 9.1)

3 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

• Collection and reporting of applicant information (Sections 2.4,

5.1, 9.2.1, and Attachment A)

• ,Effective date of enforcement provisions for larger volume

reporters (Sections 2.8 and 7)

• Whether certain installment sales contracts are extensions of

credit for purposes of th e HMDA Rule (Section 4.1.1.1)

• An exclusion from coverage for certain preliminary transactions

that consolidate new funds into a New Yo rk CEMA (Sectio n s

4.1.1.1. and 4.1.2)

• What co nstitutes a loan secured by a multifamily dwelling under

the HMDA Rule (Sections 4.1.1.2)

• The exclusion from coverage for temporary finan cing (Section

4.1.2)

• Including certain distributions from retirement and other asset

accounts when reporting income (Section 5.1.2)

• Reporting the ULI and use of check digit tool provided by the

Bureau (Section 5.2)

• Reporting loan purpose (Section 5.7)

• Reporting p roperty address and location when certain

information is unknown or unavailable (Section 5.12)

• Reporting census tract using the geocoding tool provided by the

Bureau (Sections 5.12 an d 7)

• Reporting CLTV when th e calculation includes property other

than the Identified Prop erty (Section 5.21)

• Reporting credit score when there are multiple scores or

multiple applicants (Sectio n 5.22)

• Securitizers an d automated underwriting systems (Section 5.23)

• Reporting interest rate, rate spread, and certain other data

points when revised or corrected disclosures are provided

(Sections 5.24, 5.26, and 5.28)

• Reporting the introductory rate (Section 5.25)

• Reporting rate spread, including for applications that are

approved but not accepted (Section 5.26)

• Reporting mortgage loan originator identifier for certain

purchased covered loans (Section 5.30)

• Reporting action taken if there is a counteroffer (Attachment B)

Also, makes miscellaneous administrative changes to various sections

December 2015 1.0 Original Document

4 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Table of contents

Table of contents ..............................................................................................................4

1. Introduction ................................................................................................................8

1.1 Purpose of this guide.................................................................................. 9

1.2 Additional implementation resources..................................................... 10

2. Key changes and effective dates ..........................................................................11

2.1 Institutional coverage ...............................................................................12

2.2 Transactional coverage .............................................................................13

2.3 Required data points.................................................................................15

2.4 Collection and reporting of applicant information................................. 16

2.5 Annual reporting ...................................................................................... 16

2.6 Quarterly reporting ...................................................................................17

2.7 Disclosure requirements.......................................................................... 18

2.8 Enforcement provisions for larger-volume reporters ............................ 19

3. Institutional coverage .............................................................................................20

3.1 Institutional coverage on or after January 1, 2018 ................................. 20

3.2 Exempt institutions.................................................................................. 24

4. Transactional coverage ..........................................................................................25

4.1 Covered loans ........................................................................................... 25

4.2 Reportable activity ................................................................................... 36

4.3 Partial exemptions ................................................................................... 42

5. Reportable data ........................................................................................................50

5 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.1 Applicant information ............................................................................. 50

5.2 Universal loan identifier (ULI) or non-universal loan identifier ........... 58

5.3 Application date ....................................................................................... 61

5.4 Application channel ................................................................................. 62

5.5 Preapproval request ................................................................................. 63

5.6 Loan type .................................................................................................. 63

5.7 Loan purpose............................................................................................64

5.8 Loan amount ............................................................................................ 67

5.9 Loan te rm .................................................................................................68

5.10 Action taken and date ..............................................................................69

5.11 Reasons for denial....................................................................................69

5.12 Property address and property location...................................................71

5.13 Construction method ............................................................................... 73

5.14 Occupancy type ........................................................................................ 74

5.15 Lie n status ................................................................................................ 75

5.16 Manufactured home information ............................................................ 76

5.17 Property value .......................................................................................... 77

5.18 Total units ................................................................................................ 78

5.19 Multifamily affordable units.................................................................... 79

5.20 Debt-to-income ratio ...............................................................................80

5.21 Combined loan-to-value .......................................................................... 81

5.22 Credit score information.......................................................................... 83

5.23 Automated underwriting system information ........................................ 85

5.24 Interest rate ..............................................................................................88

5.25 Introductory rate period .......................................................................... 91

5.26 Rate spread............................................................................................... 92

6 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.27 Non-amortizing features.......................................................................... 97

5.28 Data points for certain loans subject to Regulation Z ............................98

5.29 Transaction indicators ........................................................................... 102

5.30 Mortgage loan originator identifier....................................................... 103

5.31 Type of purchaser................................................................................... 104

6. Recording and reporting ......................................................................................107

6.1 Re cording ............................................................................................... 107

6.2 Reporting................................................................................................ 108

6.3 Disclosure of data.................................................................................... 110

7. Enforcement provisions .......................................................................................113

8. Mergers and acquisitions .....................................................................................114

8.1 Determining coverage ............................................................................. 114

8.2 Reporting responsibility for calendar year of merger or acquisition .... 114

8.3 Changes to appropriate Federal agency or TIN ..................................... 115

8.4 Determining quarterly reporting coverage ............................................ 116

8.5 Applicability of partial exemptions under the 2018 Act after a merger or

acquisition ............................................................................................... 117

9. Practical implementation and compliance considerations.............................119

9.1 Identifying affected institutions, products, departments, and staff ..... 119

9.2 Implementation and compliance management support activities .......123

Attachment A: ...............................................................................................................126

Attachment B: ...............................................................................................................126

7 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Action taken chart........................................................................................... 126

Attachment C: ...............................................................................................................132

Sample notices .................................................................................................132

PAPERWORK REDUCTION ACT

According to the Paperwork Reduction Act of 1995, an agency may not conduct or sponsor, and,

notwithstanding any other provision of law, a person is not required to respond to a collection of

information unless it displays a valid OMB control number. The OMB control number for this

collection is 3170-0008. It expires on November 30, 2022. The information collections created

by the Final Rule published October 28, 2015 at 80 FR 66127 will not become effective until

either three years from the date of publication of the rule or 2020 in the case of certain

information collections. The time required to complete this information collection is estimated

to average between 161 hours and 9,000 hours per response depending on the size of the

institution. The obligation to respond to this collection of information is mandatory per the

Home Mortgage Disclosure Act, 12 U.S.C. 2801-2810, as implemented by the Bureau’s

Regulation C, 12 CFR part 1003. Comments regarding this collection of information, including

the estimated response time, suggestions for improving the usefulness of the information, or

suggestions for reducing the burden to respond to this collection should be submitted to the

Bureau of Consumer Financial Protection (Attention: PRA Office), 1700 G Street NW,

Washington, DC 20552, or by email to PRA@cfpb.gov. The other agencies collecting

information under this regulation maintain OMB control numbers for their collections as

follows: Office of the Comptroller of the Currency (1557–0159), the Federal Deposit Insurance

Corporation (3064–0046), the Federal Reserve System (7100–0247), the Department of

Housing and Urban Development (2502–0529), and the National Credit Union Administration

(3133–0166).

8 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

1. Introduction

The Home Mortgage Disclosure Act (HMDA), which Congress enacted in 1975, requires certain

financial institutions to collect, record, report, and disclose information about their mortgage

lending activity. Regulation C implements HMDA and sets out specific requirements for the

collection, recording, reporting, and disclosure of mortgage lending information. The data-

related requirements in HMDA and Regulation C serve three primary purposes: (1) to help

determine whether financial institutions are serving their communities’ housing needs; (2) to

assist public officials in distributing public investment to attract private investment; and (3) to

assist in identifying potential discriminatory lending patterns and enforcing antidiscrimination

statutes.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

transferred rulemaking authority for HMDA to the Bureau of Consumer Financial Protection

(Bureau), effective July 2011. It also amended HMDA to require financial institutions to report

new data points and authorized the Bureau to require financial institutions to collect, record,

and report additional information. On August 29, 2014, the Bureau published

proposed

amendments to Regulation C to implement the Dodd-Frank Act changes and to make additional

changes. The Bureau carefully reviewed and considered the comments it received on its

proposed amendments. On October 15, 2015, the Bureau issued a final rule (2015 HMDA Rule)

amending Regulation C. The

2015 HMDA Rule was published in the Federal Register on

October 28, 2015. On August 24, 2017, the Bureau issued a final rule (2017 HMDA Rule) f urther

amending Regulation C to make technical corrections and to clarify and amend certain

requirements adopted by the 2015 HMDA Rule. The

2017 HMDA Rule was published in the

Federal Register on September 13, 2017. On May 24, 2018, the President signed the Economic

Growth, Regulatory Relief, and Consumer Protection Act (2018 Act) into law. Effective May 24,

2018, Section 104(a) of the 2018 Act created partial exemptions from some of HMDA’s

requirements for certain covered institutions. On August 31, 2018, the Bureau issued an

interpretive and procedural rule (2018 HMDA Rule) to implement and clarify Section 104(a) of

the 2018 Act. The

2018 HMDA Rule was published in the Federal Register on September 7,

2018. On October 10, 2019, the Bureau issued a final rule (2019 Rule) to extend until January 1,

2022 the current temporary loan-volume threshold for reporting data about open-end lines of

credit and incorporate the 2018 HMDA Rule into Regulation C and implement further the 2018

Act. The

2019 HMDA Rule was published in the Federal Register on October 29, 2019. On

9 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

April 16, 2020, the Bureau issued a final rule (2020 HMDA Thresholds Rule) amending

Regulation C’s institutional and transactional coverage thresholds for closed-end mortgage

loans and open-end lines of credit. The 2020 HMDA Thresholds Rule was published in the

Federal Register on May 12, 2020. In this guide, the 2015 HMDA Rule, 2017 HMDA Rule, 2018

HMDA Rule, 2019 HMDA Rule, and 2020 HMDA Thresholds Rule are collectively referred to as

the HMDA Rule.

Certain terms that are defined in Regulation C are capitalized in this guide for ease of reference.

The definitions for these terms are found in 12 CFR 1003.2.

1.1 Purpose of this guide

The purpose of this guide is to provide an easy-to-use summary of Regulation C to highlight

information that financial institutions and those that work with them might find helpful when

implementing the HMDA Rule.

This guide meets the requirements of Section 212 of the Small Business Regulatory Enforcement

Fairness Act of 1996, which requires the Bureau to issue a small entity compliance guide to help

small entities comply with new regulations. Larger entities may also find this guide useful.

This is a Compliance Aid issued by the Consumer Financial Protection Bureau. The Bureau

published a Policy Statement on Compliance Aids, available at

https://www.consumerfinance.gov/policy-compliance/rulemaking/final-rules/policy-

statement-compliance-aids/, that explains the Bureau’s approach to Compliance Aids.

Regulation C, the 2015 HMDA Rule, the 2017 HMDA Rule, the 2018 HMDA Rule, the 2019

HMDA Rule, the 2020 HMDA Thresholds Rule, and the Official Interpretations (also known as

the commentary) are the definitive sources of information regarding their requirements. The

2015 HMDA Rule, the 2017 HMDA Rule, the 2018 HMDA Rule, the 2019 HMDA Rule, and the

2020 HMDA Thresholds Rule are available at

http://www.consumerfinance.gov/regulatory-

implementation/hmda/.

The focus of this guide is Regulation C and the HMDA Rule. Except when specifically needed to

explain a provision of amended Regulation C, this guide does not discuss other Federal or State

laws that may apply to mortgage lending.

10 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

This guide has examples to illustrate some portions of the HMDA Rule. The examples do not

include all possible factual situations that could illustrate a particular provision, trigger a

particular obligation, or satisfy a particular requirement. Even though an example may identify

a fictitious financial institution as, for example, “Ficus Bank” or “Ficus Mortgage Company,” the

provision or obligation being illustrated in the example may apply to all financial institutions,

including both depository and nondepository financial institutions.

Sometimes this guide will distinguish between the requirements of the HMDA Rule and the

requirements of Regulation C as they apply before a specific part of the HMDA Rule goes into

effect. When making these distinctions, the guide generally refers to the requirements of

Regulation C as they apply before a specific part of the HMDA Rule goes into effect as “current

Regulation C.” However, it should be understood that this means the requirements of

Regulation C as they are before the specific part of the HMDA Rule being discussed goes into

effect, not Regulation C as of any specific date (such as the date the guide is being read).

1.2 Additional implementation resources

Additional resources to help institutions understand and comply with the HMDA Rule are

available on the Bureau’s website at http://www.consumerfinance.gov/regulatory-

implementation/hmda/. These resources include a list of frequently asked questions and

answers on particular topics to assist in understanding and complying with HMDA and

Regulation C.

A person who has a specific regulatory interpretation question about the HMDA Rule after

reviewing these materials may submit the question on the Bureau’s website at

https://reginquiries.consumerfinance.gov/

. Bureau staff provide only informal responses to

regulatory inquiries, and the responses do not constitute official interpretations or legal advice.

Generally, Bureau staff is not able to respond to specific inquiries the same business day or

within a particular requested timeframe. Actual response times will vary based on the number

of questions Bureau staff is handling and the amount of research needed to respond to a specific

question.

Technical questions about the HMDA Platform, or the publication of HMDA data

should be directed to hmdahelp@cfpb.gov

11 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. Key changes and effective

dates

The HMDA Rule changes: (1) the types of financial institutions that are subject to Regulation C;

(2) the types of transactions that are subject to Regulation C; (3) the data that financial

institutions are required to collect, record, and report; and (4) the processes for reporting and

disclosing HMDA data.

Most provisions of the HMDA Rule took effect on January 1, 2018 and apply to data collected in

2018 and reported in 2019 or later years. The partial exemptions created by the 2018 Act

became effective when the Act was signed into law on May 24, 2018. Further implementation of

the 2018 Act, such as the application of partial exemptions after a merger or acquisition, is

effective January 1, 2020. Certain changes regarding reporting and changes to the enforcement

provisions regarding good faith efforts are effective January 1, 2019. The new quarterly

reporting requirement and changes to the enforcement provisions for larger-volume reporters

are effective January 1, 2020. Additionally, there are institutional and transactional coverage

changes for closed-end mortgage loans that are effective July 1, 2020 and open-end lines of

credit that are effective January 1, 2022.

This section summarizes these key changes and provides the effective date for each key change.

For more detailed information on the HMDA Rule’s specific requirements, see Sections 3

through 8.

On April 16, 2020, the Bureau issued the 2020 HMDA Thresholds Rule adjusting Regulation C’s institutional and

transactional coverage thresholds for closed-end mortgage l oans and open-end lines of credit. Effective July 1,

2020, the final rule permanently raises the closed-end coverage threshold from 25 to 100 closed-end mortgage

loans in each of the two preceding calendar years. Effective January 1, 2022, when the temporary threshold of 500

open-end lines of credit expires, the final rule sets the permanent open-end threshold at 200 open-end lines of

credit in each of the two preceding calendar years.

12 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2.1 Institutional coverage

Effective January 1, 2018, for changes to institutional coverage; effective July 1, 2020, for a

change to the loan-volume threshold for covered closed-end mortgage loans; effective January

1, 2022, for a change to the loan-volume threshold for open-end lines of credit

Effective January 1, 2018, the HMDA Rule

adopts a uniform loan-volume threshold

for all financial institutions. As described

below, the loan-volume threshold for

closed-end mortgage loans and open-end

lines of credit adjusts over three effective

dates. First, from January 1, 2018, through

June 30, 2020, a financial institution is not

subject to Regulation C unless it originated

at least 25 covered closed-end mortgage

loans in each of the two preceding calendar

years or at least 500 covered open-end

lines of credit in each of the two preceding

calendar years, and it meets other

applicable coverage requirements. Second,

from July 1, 2020 through December 31,

2021, a financial institution is not subject

to Regulation C unless it originated at least

100 covered closed-end mortgage loans in

each of the two preceding calendar years or

at least 500 covered open-end lines of

credit in each of the two preceding calendar

years, and it meets other applicable

coverage requirements. Third, effective

January 1, 2022, a financial institution is

not subject to Regulation C unless it

originated at least 100 covered closed-end

mortgage loans in each of the two

preceding calendar years or at least 200

The 2018 Act added partial exemptions to

HMDA. As discussed in Section 4.3, certain

financial institutions are eligible for these

partial exemptions from some of the HMDA

Rule’s data collection and reporting

requirements. Among other things, in order

to be eligible for a partial exemption, a

financial institution must be either an

insured depository institution as defined in

Section 3 of the Federal Deposit Insurance

Act or an insured credit union as defined in

Section 101 of the Federal Credit Union Act.

As discussed in Section 4.3, an insured

depository institution with a less than

satisfactory Community Reinvestment Act

examination history is not eligible for a

partial exemption.

A financial institution that was subject to

HMDA’s closed-end requirements as of

January 1, 2020, but is no longer subject to

HMDA’s closed-end requirements as of July

1, 2020, because it originated fewer than 100

closed-end mortgage loans during 2018 or

2019, may stop collecting, recording, and

reporting HMDA data as of July 1, 2020.

Such an institution may report voluntarily

HMDA data on closed-end mortgage loans

from 2020 as long as the institution reports

data for the full calendar year 2020.

13 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

covered open-end lines of credit in each of the two preceding calendar years, and it meets other

applicable coverage requirements.

For depository financial institution coverage, the HMDA Rule maintains Regulation C’s asset-

size threshold, location test, federally related test, and loan activity test. For nondepository

financial institutions, the HMDA Rule retains the location test.

For more information regarding which financial institutions are subject to the HMDA Rule, see

Section 3 and the HMDA Institutional Coverage Charts

2.2 Transactional coverage

Effective January 1, 2018 for data collected on or after January 1, 2018 (to be reported in or

after 2019); effective July 1, 2020 for data collected on or after July 1, 2020 for a change to the

exclusion for closed-end mortgage loans; effective January 1, 2022 for data collected on or

after January 1, 2022 (to be reported in or after 2023) for a change to the exclusion for open-

end lines of credit.

The HMDA Rule modifies the types of transactions that are subject to Regulation C and

generally adopts a dwelling-secured standard for transactional coverage.

Beginning on January 1, 2018, Regulation C generally applies to consumer-purpose, closed-end

loans and open-end lines of credit that are secured by a dwelling. 12 CFR 1003.2(d), (e), and (o).

A home improvement loan is not subject to Regulation C unless it is secured by a dwelling.

Beginning on January 1, 2018, Regulation C applies to business-purpose, closed-end loans and

open-end lines of credit that are dwelling-secured and are home purchase loans, home

improvement loans, or refinancings. 12 CFR 1003.3(c)(10). For business-purpose transactions,

the HMDA Rule creates a dwelling-secured standard and maintains current Regulation C’s

purpose test.

The HMDA Rule retains existing categories of excluded transactions, clarifies some categories of

excluded transactions, and expands the existing exclusion for agricultural-purpose transactions.

12 CFR 1003.3(c). It also adds new categories of excluded transactions that are designed to

work in tandem with the HMDA Rule’s other changes. For example, from January 1, 2018

through June 30, 2020, closed-end mortgage loans are excluded transactions for a financial

14 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

institution that did not originate 25 or more of them in each of the two preceding calendar years.

Effective July 1, 2020, closed-end mortgage loans are excluded transactions for a financial

institution that did not originate 100 or more of them in each of the two preceding calendar

years. Similarly, open-end lines of credit are excluded transactions for a financial institution

that did not originate a certain number of them in each of the two preceding calendar years.

For 2018, 2019, 2020, and 2021, open-end lines of credit are excluded transactions for a

financial institution that did not originate at least 500 of them in each of the two preceding

calendar years. Effective January 1, 2022, open-end lines of credit are excluded transactions for

a financial institution that did not originate at least 200 of them in each of the two preceding

calendar years.

The HMDA Rule expands the types of

preapproval requests that are reported, but

also excludes requests regarding some types

of loans from the scope of reportable

preapproval requests. Under the HMDA

Rule, reporting of preapproval requests that

are approved but not accepted is required

instead of optional. However, under the

HMDA Rule, preapproval requests

regarding home purchase loans to be

secured by multifamily dwellings,

preapproval requests for open-end lines of credit, and preapproval requests for reverse

mortgages are not reportable.

For more information regarding the transactions that are subject to the HMDA Rule, see Section

4 and the HMDA Transactional Coverage Chart.

A financial institution may collect, record, report, and disclose information, as described in §§ 1003.4 and 1003.5,

for a closed-end mortgage loan excluded under § 1002.3(c)(11) or an open-end line of credit excluded under

§ 1002.3(c)(12) as though it were a covered loan, provided that the financial institution complies with such

requirements for all applications for closed-end mortgage loans or open-end lines of credit that it receives,

originates, and purchases that otherwise would have been covered loans during the calendar year during which final

action is taken on the excluded closed-end mortgage loan or open-end line of credit.

The 2018 Act created two partial exemptions:

one for closed-end mortgage loans and one

for open-end lines of credit. Transactions

that are subject to the HMDA Rule and are

covered by a partial exemption are still

subject to some of the HMDA Rule’s

requirements, and certain data points must

be collected, recorded, and reported for such

transactions. For more information on the

partial exemptions, see Section 4.3.

15 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2.3 Required data points

Effective January 1, 2018 and applicable to data reported in or after 2019; partial exemptions

effective May 24, 2018 and applicable for collection, recording, and reporting of data on or

after May 24, 2018.

The HMDA Rule adds the data points specified in the Dodd-Frank Act as well as data points that

the Bureau determined will assist in carrying out HMDA’s purposes. For example, the HMDA

Rule adds new data points for age, credit score, automated underwriting information, debt-to-

income ratio, unique loan identifier, property value, application channel, points and fees,

borrower-paid origination charges, discount points, lender credits, loan term, prepayment

penalty, and identification of other loan features. 12 CFR 1003.4(a). The HMDA Rule also

modifies some existing data points.

Effective May 24, 2018, the 2018 Act created partial exemptions that permit certain financial

institutions to exclude 26 data points when collecting, recording, and reporting HMDA data for

certain transactions. If a partial exemption applies to a covered transaction, an insured

depository institution or insured credit union may, but is not required to, collect, record, and

report these 26 data points. However, the insured depository institution or insured credit union

must collect, record, and report the remaining 22 data points as required by the HMDA Rule

and otherwise comply with the HMDA Rule for such covered transactions.

Generally, a financial institution collects, records, and reports the new and modified data points

under the HMDA Rule for applications on which final action is taken on or after January 1,

2018. However, if a partial exemption applies, an insured depository institution or insured

credit union is not required to collect, record, or report many of these data points as discussed in

Section 4.3.3.

A financial institution collects, records, and reports the new and modified data points, to the

extent that they apply to purchased loans, for purchases of covered loans that occur on or after

January 1, 2018.

For more information regarding the data points that must be reported under the HMDA Rule,

see Section 5. For more information on the data points that must be reported if a partial

exemption applies to a covered transaction, see Section 4.3.3.

16 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2.4 Collection and reporting of applicant

information

Effective January 1, 2018 for data collected in or after 2018 (to be reported in or after 2019)

For data collected in or after 2018, the HMDA Rule amends the requirements for collection and

reporting of information regarding an applicant’s or borrower’s ethnicity, race, and sex.

First, the HMDA Rule adds a requirement to report how the institution collected the

information about the applicant’s or borrower’s ethnicity, race, and sex. A financial institution

reports whether or not it collected the information on the basis of visual observation or

surname. 12 CFR 1003.4(a)(10)(i). Financial institutions are required to collect information

about an applicant’s ethnicity, race, and sex on the basis of visual observation or surname when

an applicant chooses not to provide the information for an application taken in person.

Second, financial institutions must permit applicants to self-identify using disaggregated ethnic

and racial subcategories and must report disaggregated information applicants provide.

However, the HMDA Rule does not require or permit financial institutions to use the

disaggregated subcategories when identifying the applicant’s ethnicity and race based on visual

observation or surname. The HMDA Rule includes a new sample data collection form in

appendix B that provides the required aggregated categories and disaggregated subcategories

for ethnicity and race. Appendix B to Part 1003.

For more information regarding the collection and reporting of applicant information under the

HMDA Rule, see Section 5.1.

2.5 Annual reporting

Effective January 1, 2019 for changes requiring electronic submission of HMDA data in 2019

and later years

The HMDA Rule retains the requirement that a financial institution submit its HMDA data to its

appropriate Federal agency by March 1 following the calendar year for which it collected the

data, but requires electronic submission of the data.

17 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The Bureau developed a new web-based tool for electronically submitting HMDA data. Financial

institutions are required to submit data electronically using the web-based tool beginning in

2018 for data collected in 2017. For more information on the submission tool, see

http://ffiec.cfpb.gov/.

Beginning in 2019, financial institutions are required to submit the new dataset electronically in

accordance with the HMDA Rule, using the new web-based submission tool and revised

procedures available at http://ffiec.cfpb.gov/.

For more information regarding annual reporting under the HMDA Rule, see Section 6.2.1.

2.6 Quarterly reporting

Effective January 1, 2020 for data collected and reported in or after 2020

The HMDA Rule imposes a new quarterly reporting requirement for larger-volume reporters.

In addition to their annual data submission, these larger-volume reporters will also

electronically submit their HMDA data for each of the first three quarters of the year on a

quarterly basis beginning in 2020. 12 CFR 1003.5(a)(1)(ii).

As of March 26, 2020, and until further notice, the Bureau does not intend to cite in an

examination or initiate an enforcement action against any institution for failure to report its

HMDA data quarterly. At a later date, the Bureau will provide information as to how and when

it expects institutions under its jurisdiction to resume quarterly HMDA data submissions.

Entities should continue collecting and recording HMDA data in anticipation of making annual

data submissions. Entities may continue making quarterly HMDA data submissions even

though the Bureau does not intend to cite or take any actions against them if they do not do so.

See the Bureau’s

Statement on Supervisory and Enforcement Practices Regarding Quarterly

Reporting Under the Home Mortgage Disclosure Act for more information.

For more information regarding quarterly reporting under the HMDA Rule, see Section 6.2.2.

18 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2.7 Disclosure requirements

Effective January 1, 2018 for data collected on or after January 1, 2017 (to be reported in or

after 2018)

The HMDA Rule replaces Regulation C’s requirements to provide a disclosure statement and

modified LAR

to the public upon request with new requirements to provide notices that the

institution’s disclosure statement and modified LAR are available on the Bureau’s website.

12 CFR 1003.5(b)(2) and (c).

The HMDA Rule also modifies the content of the posting required under Regulation C.

The HMDA Rule includes sample language that financial institutions can use to provide notice

that the institution’s HMDA data are available on the Bureau’s website and to comply with the

posting requirement. These revised disclosure requirements are effective January 1, 2018 and

apply to data collected on or after January 1, 2017 and reported in or after 2018.

The Bureau’s policy guidance on the disclosure of loan-level HMDA data

notes that for HMDA

data collected by Financial Institutions in or after 2018 and made available to the public

beginning in 2019, the Bureau intends to modify the public loan-level data to exclude certain

fields and reduce the precision of most of the values reported for certain data fields.

For more information regarding the disclosure requirements under the HMDA Rule,

see Section 6.3.

HMDA requires a financial institution to make available to the public, upon request, “loan application register

information” in the form required under Regulation C, and requires the Bureau to determine if deletions from the

information are appropriate to protect applicants’ and borrowers’ privacy interests or to protect financial

institutions from liability under privacy laws. 12 USC 304(j). Prior to being disclosed to the public, LARs must be

modified to remove loan application register information that the Bureau determines should be deleted.

See Disclosure of Loan-Level HMDA Data, 84 FR 649 (Jan. 31, 2019)

19 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2.8 Enforcement provisions for larger-

volume reporters

Effective January 1, 2020

The HMDA Rule provides that inaccuracies or omissions in quarterly reporting are not

violations of HMDA or Regulation C if the financial institution makes a good-faith effort to

report quarterly data timely, fully, and accurately, and then corrects or completes the data prior

to its annual submission. 12 CFR 1003.6(c)(2). For more information regarding the

enforcement provisions of the HMDA Rule, see Section 7.

20 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

3. Institutional coverage

An institution is required to comply with Regulation C only if it is a “financial institution” as that

term is defined in Regulation C.

3.1 Institutional coverage on or after

January 1, 2018

An institution uses two definitions, which are outlined below, as coverage tests to determine

whether it is a financial institution that is required to comply with Regulation C, on or after

January 1, 2018.

These coverage tests include loan-volume thresholds for closed-end mortgage loans and for

open-end lines of credit. For closed-end mortgage loans, the HMDA Rule includes a lower

threshold that is effective from January 1, 2018, through July 1, 2020. Similarly, for open-end

lines of credit, the HMDA Rule includes both a temporary higher threshold that is effective

January 1, 2018 and a lower threshold that takes effect January 1, 2022. These thresholds are

discussed in more detail below.

Although the HMDA Rule is the definitive source regarding the institutional coverage criteria,

an institution may also find the Bureau’s HMDA Institutional Coverage Charts

helpful when it is

determining whether it is subject to Regulation C, on or after January 1, 2018.

Throughout the remainder of this guide, an institution that meets the criteria set forth in the

HMDA Rule’s definition of depository financial institution is referred to as a Depository

Financial Institution, and an institution that meets the criteria set forth in the HMDA Rule’s

definition of nondepository financial institution is referred to as a Nondepository Financial

Institution. The capitalized term Financial Institution refers to an institution that is either a

Depository Financial Institution or a Nondepository Financial Institution and that is an

institution that is subject to HMDA Rule.

21 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

3.1.1 Depository financial institutions

Under the HMDA Rule, effective January 1, 2018, a bank, savings association, or credit union is

a Depository Financial Institution, a Financial Institution, and subject to Regulation C if it meets

ALL

of the following:

1. Asset-Size Threshold. On the preceding December 31, the bank, savings association, or

credit union had assets in excess of the asset-size threshold published annually in the

Federal Register and posted on the Bureau’s website. The phrase “preceding December 31”

refers to the December 31 immediately preceding the current calendar year. For example, in

2018, the preceding December 31 is December 31, 2017. 12 CFR 1003.2(g)(1)(i).

2. Location Test. On the preceding December 31, the bank, savings association, or credit

union had a home or Branch Office located in an MSA. 12 CFR 1003.2(g)(1)(ii).

For purposes of this location test, a Branch Office for a bank, savings association, or credit

union is an office: (a) of the bank, savings association, or credit union (b) that is considered

a branch by the institution’s Federal or State supervisory agency. For purposes of the

HMDA Rule, an automated teller machine or other free-standing electronic terminal is not a

Branch Office regardless of whether the supervisory agency would consider it a branch.

12 CFR 1003.2(c)(1). A Branch Office of a credit union is any office where member accounts

are established or loans are made, whether or not an agency has approved the office as a

branch. Comment 2(c)(1)-1.

3. Loan Activity Test. During the preceding calendar year, the bank, savings association, or

credit union originated at least one Home Purchase Loan or Refinancing of a Home

Purchase Loan secured by a first lien on a one-to-four-unit Dwelling.

12 CFR 1003.2(g)(1)(iii).

For more information on whether a loan is secured by a Dwelling, is a Home Purchase Loan,

or is a Refinancing of a Home Purchase Loan, see Sections 4.1.1.2 and 5.7.

4. Federally Related Test. The bank, savings association, or credit union:

a. Is federally insured; or

When determining whether it meets these criteria on or after January 1, 2018, a bank, savings association, or credit

union relies on the definitions in the HMDA Rule.

22 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

b. Is federally regulated; or

c. Originated at least one Home Purchase Loan or Refinancing of a Home Purchase Loan

that was secured by a first lien on a one-to-four-unit Dwelling and also (i) was insured,

guaranteed or supplemented by a Federal agency or (ii) was intended for sale to Fannie

Mae or Freddie Mac. 12 CFR 1003.2(g)(1)(iv).

5. Loan-Volume Thresholds. The bank, savings association, or credit union meets or

exceeds either the loan-volume threshold for Closed-End Mortgage Loans or the loan-

volume threshold for Open-End Lines of Credit in each of the two preceding calendar years.

Effective January 1, 2018 through June 30, 2020, the loan-volume threshold for Closed-End

Mortgage Loans is 25 Closed-End Mortgage Loans, and effective July 1, 2020, the loan-

volume threshold for Closed-End Mortgage Loans is 100 Closed-End Mortgage Loans.

Effective January 1, 2018 through December 31, 2021, the loan-volume threshold for Open-

End Lines of Credit is 500 Open-End Lines of Credit, and effective January 1, 2022, the

loan-volume threshold for Open-End Lines of Credit is 200 Open-End Lines of Credit.

When the bank, savings association, or credit union determines whether it meets these loan-

volume thresholds, it does not count transactions excluded by 12 CFR 1003.3(c)(1) through (10)

and (13). 12 CFR 1003.2(g)(1)(v). These Excluded Transactions are discussed below in Section

4.1.2 in paragraphs 1 through 10 and in paragraph 13. For more information on Closed-End

Mortgage Loans, Open-End Lines of Credit, and Excluded Transactions, see Section 4.1.

When determining if it meets the loan-volume thresholds, a bank, savings association, or credit

union only counts Closed-End Mortgage Loans and Open-End Lines of Credit that it originated.

Only one institution is deemed to have originated a specific Closed-End Mortgage Loan or

Open-End Line of Credit under the HMDA Rule, even if two or more institutions are involved in

the origination process. Only the institution that is deemed to have originated the transaction

under the HMDA Rule counts it for purposes of the loan-volume threshold. Comments 2(g)-5;

see also comments 4(a)-2 through -4. For more information on how to determine whether an

institution is deemed to have originated a transaction under the HMDA Rule, see Section 4.2.3.

The HMDA Rule also includes a separate test to ensure that Financial Institutions that meet

only the Closed-End Mortgage Loan threshold are not required to report their Open-End Lines

of Credit, and that Financial Institutions that meet only the Open-End Line of Credit threshold

are not required to report their Closed-End Mortgage Loans. 12 CFR 1003.3(c)(11) and

(12). For more information, see Section 4.1.2.

23 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

3.1.2 Nondepository financial institutions

Under the HMDA Rule, effective January 1, 2018, a for-profit mortgage-lending institution

(other than a bank, savings association, or credit union) is a Nondepository Financial

Institution, a Financial Institution, and subject to Regulation C if it meets BOTH

of the

following:

1. Location Test. The mortgage-lending institution had a home or Branch Office in an MSA

on the preceding December 31. The phrase “preceding December 31” refers to the December

31 immediately preceding the current calendar year. For example, in 2018, the preceding

December 31 is December 31, 2017. 12 CFR 1003.2(g)(2)(i).

For purposes of this location test, a Branch Office of a for-profit mortgage-lending

institution is: (a) any one of the institution’s offices (b) at which the institution takes from

the public Applications for Covered Loans. A mortgage-lending institution is also deemed to

have a Branch Office in an MSA if, in the preceding calendar year, it received Applications

for, originated, or purchased five or more Covered Loans related to property located in that

MSA. 12 CFR 1003.2(c)(2). For more information on Applications and Covered Loans, see

Section 4.

2. Loan-Volume Thresholds. The mortgage-lending institution meets or exceeds either the

Closed-End Mortgage Loan loan-volume threshold or the Open-End Line of Credit loan-

volume threshold in each of the two preceding calendar years. Effective January 1, 2018,

through June 30, 2020, the loan-volume threshold for Closed-End Mortgage Loans is 25

Closed-End Mortgage Loans, and effective July 1, 2020, the loan-volume threshold for

Closed-End Mortgage Loans is 100 Closed-End Mortgage Loans. Effective January 1, 2018

through December 31, 2021, the loan-volume threshold for Open-End Lines of Credit is 500

Open-End Lines of Credit, and effective January 1, 2022, the loan-volume threshold for

Open-End Lines of Credit is 200 Open-End Lines of Credit.

When an institution determines whether it meets the loan-volume thresholds, it does not count

transactions excluded by 12 CFR 1003.3(c)(1) through (10) and (13). 12 CFR 1003.2(g)(2)(ii).

These Excluded Transactions are discussed below in Section 4.1.2 in paragraphs 1 through 10

When determining whether it meets these criteria on or after January 1, 2018, a mortgage-lending institution relies

on the definitions in the HMDA Rule.

24 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

and paragraph 13. For more information on Closed-End Mortgage Loans, Open-End Lines of

Credit, and Excluded Transactions, see Section 4.1.

When determining if it meets the loan-volume thresholds, a mortgage-lending institution only

counts Closed-End Mortgage Loans and Open-End Lines of Credit that it originated. Only one

institution is deemed to have originated a specific Closed-End Mortgage Loan or Open-End Line

of Credit under the HMDA Rule, even if two or more institutions are involved in the origination

process. Only the institution that is deemed to have originated the transaction under the HMDA

Rule counts it for purposes of the loan-volume threshold. Comment 2(g)-5. See also comments

4(a)-2 through -4. For more information on how to determine whether an institution is deemed

to have originated a transaction under the HMDA Rule, see Section 4.2.3. The HMDA Rule also

includes a separate test to ensure that Financial Institutions that meet only the Closed-End

Mortgage Loan threshold are not required to report their Open-End Lines of Credit, and that

Financial Institutions that meet only the Open-End Line of Credit threshold are not required to

report their Closed-End Mortgage Loans. 12 CFR 1003.3(c)(11) and (12). For more information,

see Section 4.1.2.

3.2 Exempt institutions

Regulation C provides that Financial Institutions may apply for an exemption from coverage,

and the HMDA Rule does not change this provision. Specifically, the Bureau may exempt a

State-chartered or State-licensed Financial Institution if the Bureau determines that the

Financial Institution is subject to a State disclosure law that contains requirements substantially

similar to those imposed by Regulation C and adequate enforcement provisions. Any State-

licensed or State-chartered Financial Institution or association of such institutions may apply to

the Bureau for an exemption. An exempt institution shall submit the data required by State law

to its State supervisory agency. 12 CFR 1003.3(a). A Financial Institution that loses its

exemption must comply with Regulation C beginning with the calendar year following the year

for which it last reported data under the State disclosure law. 12 CFR 1003.3(b).

25 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

4. Transactional coverage

A Financial Institution is required to collect, record, and report information only for

transactions that are subject to Regulation C. Effective January 1, 2018, the HMDA Rule

changes the types of transactions that are subject to Regulation C. This guide uses the

capitalized term Covered Loan to refer to a loan or line of credit that is subject to Regulation C,

effective January 1, 2018. As of that date, a Financial Institution is required to collect, record,

and report information only for a transaction that involves a Covered Loan, such as the

origination or purchase of a Covered Loan.

A Financial Institution can use Section 4.1 of this guide, below, for assistance in determining

whether a transaction involves a Covered Loan.

After a Financial Institution has determined that a transaction involves a Covered Loan, it can

use Section 4.2 for assistance in determining whether the HMDA Rule requires it to collect,

record, and report information related to the transaction. A Financial Institution can use

Section 4.3 to help it determine if a transaction that involves a Covered Loan is partially exempt

from some of the HMDA Rule’s requirements for collecting, recording, and reporting

information.

4.1 Covered loans

A Covered Loan can be either a Closed-End Mortgage Loan or an Open-End Line of Credit (see

Section 4.1.1), but an Excluded Transaction cannot be a Covered Loan (see Section 4.1.2).

12 CFR 1003.2(e).

To determine if a transaction is subject to amended Regulation C, effective January 1, 2018, a

Financial Institution should first determine whether the loan or line of credit involved in the

transaction is either a Closed-End Mortgage Loan or an Open-End Line of Credit. See Section

4.1.1. If the loan or line of credit is neither a Closed-End Mortgage Loan nor an Open-End Line

of Credit, the transaction does not involve a Covered Loan, and the Financial Institution is not

required to report the transaction. If the loan or line of credit is either a Closed-End Mortgage

Loan or an Open-End Line of Credit, the Financial Institution must determine if the Closed-End

Mortgage Loan or Open-End Line of Credit is an Excluded Transaction. See Section 4.1.2. If the

26 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Closed-End Mortgage Loan or an Open-End Line of Credit is an Excluded Transaction, it is not a

Covered Loan, and the Financial Institution is not required to report the transaction. If the loan

or line of credit is a Closed-End Mortgage Loan or an Open-End Line of Credit and is not an

Excluded Transaction, the Financial Institution may be required to report information related to

the transaction. See Sections 4.2 and 4.3.

4.1.1 Closed-end mortgage loans and open-end lines of

credit

A Closed-End Mortgage Loan is:

1. An extension of credit;

2. Secured by a lien on a Dwelling; and

3. Not an Open-End Line of Credit. 12 CFR 1003.2(d).

An Open-End Line of Credit is:

1. An extension of credit;

2. Secured by a lien on a Dwelling; and

3. An open-end credit plan for which:

a. The lender reasonably contemplates repeated transactions;

b. The lender may impose a finance charge from time-to-time on an outstanding unpaid

balance; and

c. The amount of credit that may be extended to the borrower during the term of the plan

(up to any limit set by the lender) is generally made available to the extent that any

outstanding balance is repaid. 12 CFR 1003.2(o); 12 CFR 1026.2(a)(20).

27 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Financial Institutions may rely on Regulation Z, 12 CFR 1026.2(a)(20),

and its official

commentary when determining whether a transaction is extended under a plan for which the

lender reasonably contemplates repeated transactions, the lender may impose a finance charge

from time-to-time on an outstanding unpaid balance, and the amount of credit that may be

extended to the borrower during the term of the plan is generally made available to the extent

that any outstanding balance is repaid.

A business-purpose transaction that is exempt from Regulation Z but is otherwise open-end

credit under Regulation Z, 12 CFR 1026.2(a)(20), would be an Open-End Line of Credit under

the HMDA Rule if it is an extension of credit secured by a lien on a Dwelling and is not an

Excluded Transaction. Comment 2(o)-1.

4.1.1.1 Extension of credit

A closed-end loan or open-end line of credit is not a Closed-End Mortgage Loan or an Open-End

Line of Credit under the HMDA Rule unless it involves an extension of credit. Depending on the

facts and circumstances, some transactions completed pursuant to installment sales contracts,

such as some land contracts, may not be Closed-End Mortgage Loans because no credit is

extended. Comment 2(d)-2. Individual draws on an Open-End Line of Credit are not separate

extensions of credit. Comment 2(o)-2.

Under the HMDA Rule, an “extension of credit” generally requires a new debt obligation.

Comment 2(d)-2. Thus, for example, a loan modification where the existing debt obligation is

not satisfied and replaced is not generally a Covered Loan (i.e., Closed-End Mortgage Loan or

Open-End Line of Credit) under the HMDA Rule. Except as described below, if a transaction

modifies, renews, extends, or amends the terms of an existing debt obligation, but the existing

debt obligation is not satisfied and replaced, the transaction is not a Covered Loan. It is

important to note that the HMDA Rule defines the phrase “extension of credit” differently than

Regulation B, 12 CFR part 1002.

Comment 2(d)-2 and 2(o)-2.

The HMDA Rule provides two narrow exceptions to the requirement that an “extension of

credit” involve a new debt obligation. The exceptions are designed to capture transactions that

Regulation Z, 12 CFR part 1026, implements the Truth in Lending Act.

Regulation B, 12 CFR part 1002, implements the Equal Credit Opportunity Act.

28 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the Bureau believes are substantially similar to new debt obligations and should be treated as

such.

First, the HMDA Rule maintains Regulation C’s coverage of loan assumptions, even if no new

debt obligation is created. A loan assumption is a transaction in which a Financial Institution

enters into a written agreement accepting a new borrower in place of an existing borrower as the

obligor on an existing debt obligation. The HMDA Rule clarifies that, under Regulation C,

assumptions include successor-in-interest transactions in which an individual succeeds the

prior owner as the property owner and then assumes the existing debt secured by the property.

Assumptions are extensions of credit under the HMDA Rule even if the new borrower merely

assumes the existing debt obligation and no new debt obligation is created. Comment 2(d)-2.i.

Second, the HMDA Rule provides that a transaction completed pursuant to a New York State

consolidation, extension, and modification agreement and classified as a supplemental

mortgage under New York Tax Law Section 255, such that the borrower owes reduced or no

mortgage recording taxes, (New York CEMA) is an extension of credit under the HMDA Rule.

However, the HMDA Rule also provides that certain transactions providing new funds that are

consolidated into a New York CEMA are excluded from the HMDA reporting requirements.

Comment 2(d)-2.ii. See Section 4.1.2 for additional information on the exclusion for certain

transactions consolidated into a New York CEMA.

4.1.1.2 Secured by a lien on a dwelling

A loan is not a Closed-End Mortgage Loan and a line of credit is not an Open-End Line of Credit

unless it is secured by a lien on a Dwelling.

A Dwelling is a residential structure. There is no requirement that the structure be attached to

real property or that it be the applicant’s or borrower’s residence. Examples of Dwellings

include:

1. Principal residences;

2. Second homes and vacation homes;

3. Investment properties;

4. Residential structures attached to real property;

5. Detached residential structures;

29 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

6. Individual condominium and cooperative units;

7. Manufactured Homes

or other factory-built homes; and

8. Multifamily residential structures or communities, such as apartment buildings,

condominium complexes, cooperative

buildings or housing complexes, and

Manufactured Home communities.

12 CFR 1003.2(f); comments 2(f)-1

and -2.

A Dwelling is not limited to a structure

that has four or fewer units and includes a

Multifamily Dwelling, which is a Dwelling

that contains five or more individual

dwelling units. A Multifamily Dwelling

includes a Manufactured Home

community.

A loan related to a Manufactured Home community is secured by a Dwelling even if it is not

secured by any individual Manufactured Homes, but is secured only by the land that constitutes

A Manufactured Home is a residential structure that satisfies the definition of “manufactured home” in the U.S.

Department of Housing and Urban Development’s (HUD’s) regulations, 24 CFR 3280.2, for establishing

manufactured home construction and safety standards. 12 CFR 1003.2(l). A modular home or factory-b uil t home

that does not meet HUD’s regulations is not a Manufactured Home under the HMDA Rule. A Manufactured Home

will generally bear a HUD Certification Label and data plate noting compliance with the Federal standards.

Comment 2(l)-2.

A loan is not secured by a Multifamily

Dwelling for purposes of the HMDA Rule

merely because it is secured by five or more

individual units. In order for a loan to be

secured by a Multifamily Dwelling, the

Dwelling must contain five or more

individual units. See comment 2(n)-3 for

examples of when a loan is and is not secured

by a Multifamily Dwelling.

Examples: A landlord obtains a closed-end mortgage loan from a Financial Institution

and uses the proceeds to improve five separate Dwellings, each with one individual unit,

located in different parts of a town. The loan is secured by the five separate Dwellings,

but is not secured by a Multifamily Dwelling.

An investor obtains a closed-end mortgage loan from a Financial Institution and uses the

proceeds to purchase ten individual condominium units in a 100-unit condominium

complex. The loan is secured by the ten individual units, but not by the entire

condominium complex. The loan is secured by the ten separate Dwellings, but is not

secured by a Multifamily Dwelling.

30 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the Manufactured Home community. However, a loan related to a multifamily residential

structure or community other than a Manufactured Home community is not secured by a

Dwelling unless it is secured by one or more individual dwelling units. For example, a loan that

is secured only by the common areas of a condominium complex or only by an assignment of

rents from an apartment building is not secured by a Dwelling. Comment 2(f)-2.

The following are not Dwellings:

1. Recreational vehicles, such as boats, campers, travel trailers, or park model recreational

vehicles;

2. Houseboats, floating homes, or mobile homes constructed before June 15, 1976;

3. Transitory residences, such as hotels, hospitals, college dormitories, or recreational

vehicle parks; and

4. Structures originally designed as a Dwelling but used exclusively for commercial

purposes, such as a home converted to a daycare facility or professional office. Comment

2(f)-3.

A property that is used for both residential and commercial purposes, such as a building that has

apartment and retail units, is a Dwelling if the property’s primary use is residential. Comment

2(f)-4.

A property used for both long-term housing and to provide assisted living or supportive housing

services is a Dwelling. However, transitory residences used to provide such services are not

Dwellings. Properties used to provide medical care, such as skilled nursing, rehabilitation, or

long-term medical care, are not Dwellings. If a property is used for long-term housing, to

provide related services (such as assisted living) and to provide medical care, the property is a

Dwelling if its primary use is residential. Comment 2(f)-5.

A Financial Institution may use any reasonable standard to determine a property’s primary use,

such as square footage, income generated, or number of beds or units allocated for each use. It

may select the standard on a case-by-case basis. Comments 2(f)-4 and -5.

4.1.2 Excluded transactions

Regulation C does not apply to transactions that are specifically excluded from coverage.

12 CFR 1003.3(c). Therefore, an Excluded Transaction is not a Covered Loan. The HMDA Rule

31 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

retains and clarifies existing categories of transactions that are excluded from coverage. It also

expands the existing exclusion for agricultural loans, and adds new categories of transactions

that are excluded from coverage. Effective January 1, 2018, the following are Excluded

Transactions:

1. A Closed-End Mortgage Loan or an Open-End Line of Credit that a Financial Institution

originates or purchases in a fiduciary capacity, such as a Closed-End Mortgage Loan or an

Open-End Line of Credit that a Financial Institution originates or purchases as a trustee.

12 CFR 1003.3(c)(1); comment 3(c)(1).

2. A Closed-End Mortgage Loan or an Open-End Line of Credit secured by a lien on

unimproved land. 12 CFR 1003.3(c)(2). Generally, a loan or line of credit must be secured

by a Dwelling to be a Covered Loan. The HMDA Rule also lists Closed-End Mortgage Loans

and Open-End Lines of Credit secured only by vacant or unimproved land as Excluded

Transactions. However, a loan or line of credit secured by a lien on unimproved land is

deemed to be secured by a Dwelling (and might not be excluded) if the Financial Institution

knows, based on information that it receives from the applicant or borrower at the time the

Application is received or the credit decision is made, that the proceeds of that loan or credit

line will be used within two years after closing or account opening to construct a Dwelling

on, or to purchase a Dwelling to be placed on, the land. Comment 3(c)(2)-1.

32 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

3. A Closed-End Mortgage Loan or an Open-End Line of Credit that is temporary financing. A

transaction is excluded as temporary financing if it is designed to be replaced by separate

permanent financing extended to the same borrower at a later time. The separate

permanent financing may be extended by any lender (i.e., by either the lender that extended

the temporary financing or another lender). A construction-only loan or line of credit is

considered temporary financing and excluded under the HMDA Rule if the loan or line of

credit is extended to a person exclusively to construct a Dwelling for sale.

Comment 3(c)(3)-2.

4. The purchase of an interest in a pool of Closed-End Mortgage Loans or Open-End Lines of

Credit, such as mortgage-participation certificates, mortgage-backed securities, or real estate

mortgage investment conduits. 12 CFR 1003.3(c)(4); comment 3(c)(4)-1.

Examples: Ficus Bank extends a bridge or swing loan to finance a borrower’s down

payment for a home purchase. The borrower will pay off the bridge or swing loan with

funds from the sale of his or her existing home and obtain permanent financing from

Ficus Bank at that time. The bridge or swing loan is excluded as temporary financing.

Ficus Bank extends a construction loan to a borrower to finance construction of the

borrower’s Dwelling. The borrower will obtain a new extension of credit for permanent

financing of the Dwelling from either Ficus Bank or another lender. Ficus Bank renews

the construction loan several times before the borrower obtains a new extension of credit

from another lender for permanent financing. The construction loan is excluded as

temporary financing.

Ficus Bank extends a construction loan to a borrower to finance construction of the

borrower’s Dwelling. The construction loan will automatically convert to permanent

financing after the construction phase is complete. The construction loan is not

temporary financing because it is not designed to be “replaced by” separate permanent

financing.

Ficus Bank extends a nine-month loan to an investor, who uses the loan proceeds to

purchase a home, renovate it, and sell it before the loan term expires. The loan is not

temporary financing because it is not designed to be “replaced by” separate permanent

financing.

33 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5. The purchase solely of the right to service Closed-End Mortgage Loans or Open-End Lines of

Credit. 12 CFR 1003.3(c)(5).

6. The purchase of a Closed-End Mortgage Loan or an Open-End Line of Credit as part of a

merger or acquisition or as part of the acquisition of all of a Branch Office’s assets and

liabilities. 12 CFR 1003.3(c)(6); comment 3(c)(6)-1. For more information on mergers and

acquisitions under the HMDA Rule, see Section 8.

7. A Closed-End Mortgage Loan or an Open-End Line of Credit, or an Application for a Closed-

End Mortgage Loan or Open-End Line of Credit, for which the total dollar amount is less

than $500. 12 CFR 1003.3(c)(7).

8. The purchase of a partial interest in a Closed-End Mortgage Loan or an Open-End Line of

Credit. 12 CFR 1003.3(c)(8); comment 3(c)(8)-1.

9. A Closed-End Mortgage Loan or an Open-End Line of Credit if the proceeds are used

primarily for agricultural purposes or if the Closed-End Mortgage Loan or Open-End Line of

Credit is secured by a Dwelling that is located on real property that is used primarily for

agricultural purposes. 12 CFR 1003.3(c)(9); comment 3(c)(9)-1. The HMDA Rule directs

Financial Institutions to Regulation Z’s official commentary for guidance on what is an

agricultural purpose. Regulation Z’s official commentary states that agricultural purposes

include planting, propagating, nurturing, harvesting, catching, storing, exhibiting,

marketing, transporting, processing, or manufacturing food, beverages, flowers, trees,

livestock, poultry, bees, wildlife, fish or shellfish by a natural person engaged in farming,

fishing, or growing crops, flowers, trees, livestock, poultry, bees or wildlife. See comment

3(a)-8 in the official interpretations of Regulation Z, 12 CFR part 1026. A Financial

Institution may use any reasonable standard to determine the primary use of the property,

and may select the standard to apply on a case-by-case basis. Comment 3(c)(9)-1.

10. A Closed-End Mortgage Loan or an Open-End Line of Credit that is or will be made

primarily for business or commercial purposes, unless it is a Home Improvement Loan, a

Home Purchase Loan, or a Refinancing. 12 CFR 1003.3(c)(10). Not all transactions that are

primarily for a business purpose are Excluded Transactions. Thus, a Financial Institution

must collect, record, and report data for Dwelling-secured, business-purpose loans and lines

of credit that are Home Improvement Loans, Home Purchase Loans, or Refinancings if no

other exclusion applies. For more information on determining whether a loan or line of

credit is a Home Purchase Loan, Home Improvement Loan, or Refinancing, see Section 5.7.

The HMDA Rule provides that, if a Closed-End Mortgage Loan or an Open-End Line of

Credit is deemed to be primarily for a business, commercial, or organizational purposes

34 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

under Regulation Z, 12 CFR 1026.3(a) and its official commentary, then the loan or line of

credit also is deemed to be primarily for a business or commercial purpose under the HMDA

Rule. Comment 3(c)(10)-2. For more information and examples of business-purpose or

commercial-purpose transactions that are Covered Loans, see comment 3(c)(10)-3 and -4.

11. A Closed-End Mortgage Loan if the Financial Institution originated fewer than the

applicable threshold forClosed-End Mortgage Loans in either of the two preceding calendar

years. 12 CFR 1003.3(c)(11); comment 3(c)(11)-1. Effective January 1, 2018 until June 30,

2020, the applicable threshold is 25 Closed-End Mortgage Loans, and effective July 1, 2020,

the applicable threshold is 100 Closed-End Mortgage Loans. A Financial Institution is not

required to collect, record, or report Closed-End Mortgage Loans if it originated fewer than

the applicable theshold in either of the two preceding calendar years. However, the

Financial Institution may still be required to collect and report information regarding Open-

End Lines of Credit, depending on the number of Open-End Lines of Credit it originates in

each of the preceding two calendar years. For more information on how to determine if a

Financial Institution “originated” a particular loan when multiple entities are involved in the

transaction, see Section 4.2.3.

A Financial Institution may report

applications for, originations of, and

purchases of Closed-End Mortgage Loans

that are excluded transactions under 12

CFR 1003.3(c)(11). However a Financial

Institution that chooses to report such

excluded applications, originations, and

purchases must report all such

applications it received for Closed-End

Mortgage Loans, all Closed-End Mortgage

Loans it originates, and all Closed-End

Mortgage Loans it purchases that would

otherwise be Covered Loans for a given

calendar year. 12 CFR 1003.3(c)(11).

Effective January 1, 2018, Regulation B

permits a Financial Institution to collect information regarding the ethnicity, race, and sex of

an applicant for a Closed-End Mortgage Loan that is an excluded transaction under 12 CFR

1003.3(c)(11), if the Financial Institution submits HMDA data concerning such Closed-End

Mortgage Loans and applications or if it submitted such HMDA data for any of the preceding

five calendar years. See the final rule issued on September 20, 2017.

When an institution determines whether it

meets the loan-volume thresholds, it does

not count transactions excluded by

12 CFR 1003.3(c)(1) through (10) a nd

(13). 12 CFR 1003.2(g)(2)(ii). These

Excluded Transactions are discussed in this

Section 4.1.2 in paragraphs 1 through 10 and

paragraph 13. When determining if it meets

the loan-v olume thresholds, a Financial

Institution only counts Closed-End Mortgage

Loans or Open-End Lines of Credit, as

applicable, that it originated.

35 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

12. An Open-End Line of Credit if the number of Open-End Lines of Credit that the Financial

Institution originated in either of the two preceding calendar years does not meet or exceed

the applicable threshold. 12 CFR 1003.3(c)(12); comment 3(c)(12)-1. Effective January 1,

2018 until December 31, 2021, the applicable threshold is 500 Open-End Lines of Credit.

During this time period, a Financial Institution is not required to collect, record, or report

Open-End Lines of Credit if it originated fewer than 500 of them in either of the two

preceding calendar years. Effective January 1, 2022, the applicable threshold will be 200

Open-End Lines of Credit. Effective January 1, 2022, a Financial Institution is not required

to collect, record, or report Open-End Lines of Credit if it originated fewer than 200 of them

in either of the two preceding calendar years. Comment 3(c)(12)-1. However, the Financial

Institution will still be required to collect and report information regarding Closed-End

Mortgage Loans, depending on the number of Closed-End Mortgage Loans it originates in

each of the preceding two calendar years. For more information on how to determine if a

Financial Institution “originated” a particular line of credit when multiple entities are

involved in the transaction, see Section 4.2.3.

A Financial Institution may report applications for, originations of, or purchases of Open-

End Lines of Credit that are excluded transactions under 12 CFR 1003.3(c)(12). However, a

Financial Institution that chooses to report such excluded applications, originations, or

purchases must report all applications for Open-End Lines of Credit that it receives, all

Open-End Lines of Credit it originates, and all Open-End Lines of Credit it purchases that

would otherwise be Covered Loans for a given calendar year. 12 CFR 1003.3(c)(12);

comment 3(c)(12)-2. Effective January 1, 2018, Regulation B permits a Financial Institution

to collect information regarding the ethnicity, race, and sex of an applicant for an Open-End

Line of Credit that is an excluded transaction under 12 CFR 1003.3(c)(12), if it submits

HMDA data concerning such Open-End Lines of Credits and applications or if it submitted

such HMDA data for any of the preceding five calendar years. See the final rule issued on

September 20 2017.

13. A transaction that provided (or, in the case of an application, proposed to provide) new

funds to the borrower in advance of being consolidated in a New York CEMA classified as a

supplemental mortgage under New York Tax Law section 255. However, the transaction is

excluded only if final action on the consolidation was taken in the same calendar year as the

final action on the new funds transaction. 12 CFR 1003.3(13). Additionally, the transaction

is excluded only if, at the time that it originated the transaction providing the new funds, the

Financial Institution intended to consolidate the loan into a New York CEMA. This

exclusion does not apply to similar preliminary transactions that are consolidated pursuant

to laws other than New York Tax Law section 255. Such preliminary transactions under

36 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

other laws must be reported if they are Covered Loans and are not subject to another

exclusion. Comment 3(c)(13)-1.

New funds provided in advance of being consolidated into a New York CEMA classified as a

supplemental mortgage under New York Tax Law section 255 are reported only insofar as

they form part of the total amount of the reported New York CEMA. They are not reported

as a separate amount. If a New York CEMA that consolidates an excluded preliminary

transaction is carried out in a transaction involving an assumption, the Financial Institution

reports the New York CEMA and does not report the preliminary transaction separately.

Comment 3(c)(13)-1.

4.2 Reportable activity

Once a Financial Institution has determined whether a transaction involves a Covered Loan, it

must determine whether it has engaged in activity that obligates it to report information about

the transaction. Generally, a Financial Institution is required to report information for actions

taken on Applications (as that term is defined below) for Covered Loans, originations of Covered

Loans, and purchases of Covered Loans. If a Financial Institution receives an Application and

that Application results in the Financial Institution originating a Covered Loan, the Financial

Institution reports the origination of the Covered Loan, and does not separately report the

Application. For more information on when to report information regarding Applications and

Covered Loans, see Sections 4.2.1 and 4.2.2. There are special rules that apply if multiple

entities are involved in the transaction. These special rules are discussed in Section 4.2.3.

There are also partial exemptions that reduce the amount of information that certain Financial

Institutions are required to report for a transaction involving a Covered Loan (i.e., an

Application for, an origination of, or a purchase of a Covered Loan). These partial exemptions

are discussed in Section 4.3.

4.2.1 Applications

For purposes of the HMDA Rule, an Application is: (a) an oral or written request (b) for a

Covered Loan (c) that is made in accordance with procedures the Financial Institution uses for

the type of credit requested. 12 CFR 1003.2(b)(1).

37 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

This definition of Application is similar to the Regulation B definition, except that

prequalification requests

are not Applications under the HMDA Rule. Interpretations that

appear in the official commentary to Regulation B are generally applicable to the definition of

Application under the HMDA Rule, except for those interpretations that include a

prequalification request within the definition of Application. Comment 2(b)-1.

Under the HMDA Rule, a request for a preapproval may be treated differently than a request for

a prequalification for certain types of loans. The determination of whether a request is a

prequalification request (which is not an Application) or a preapproval request (which might be

an Application) is based on the HMDA Rule, not on the labels that an institution uses or

interpretations of other regulations, such as Regulation B.

A preapproval request is an Application under the HMDA Rule if the request is:

1. For a Home Purchase Loan;

2. Not secured by a Multifamily Dwelling;

3. Not for an Open-End Line Credit or for a Reverse Mortgage;

and

4. Reviewed under a Preapproval Program (see definition of Preapproval Program

immediately below). 12 CFR 1003.2(b)(2).

A Preapproval Program for purposes of the HMDA Rule is a program in which the Financial

Institution:

1. Conducts a comprehensive analysis of the applicant’s creditworthiness (including income

verification), resources, and other matters typically reviewed as part of the Financial

Institution’s normal credit evaluation program; and then

Generally, a prequalification request is a request (other than a preapproval request) by a prospective loan applicant

for a preliminary determination of whether the prospective loan applicant would likely qualify for credit under the

Financial Institution’s standards, or for a determination of the amount of credit for which the prospective applicant

would likely qualify. The HMDA Rule does not require a Financial Institution to report prequalification requests,

even though these requests may constitute “applications” under Regulation B. Comment 2(b)-2.

A Reverse Mortgage is a Closed-End Mortgage Loan or an Open-End Line of Credit that is a reverse mortgage

transaction as defined in Regulation Z, but without regard to whether the loan or line is secured by a principal

dwelling. 12 CFR 1003.2(q).

38 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. Issues a written commitment that: (a) is for a Home Purchase Loan; (b) is valid for a

designated period of time and up to a specified amount, and (c) is subject only to

specifically permitted conditions. 12 CFR 1003.2(b)(2).

The written commitment issued as part of the Preapproval Program can be subject to only the

following types of conditions:

1. Conditions that require the identification of a suitable property;

2. Conditions that require that no material change occur regarding the applicant’s financial

condition or creditworthiness prior to closing; and

3. Limited conditions that (a) are not related to the applicant’s financial condition or

creditworthiness and (b) the Financial Institution ordinarily attaches to a traditional

home mortgage application. Examples of conditions ordinarily attached to a traditional

home mortgage application include requiring an acceptable title insurance binder or a

certificate indicating clear termite inspection and, if the applicant plans to use the

proceeds from the sale of the applicant’s present home to purchase a new home, a

settlement statement showing adequate proceeds from the sale of the present home.

12 CFR 1003.2(b)(2); comment 2(b)-3.

A program that a Financial Institution describes as a “preapproval program” but that does not

satisfy the HMDA Rule definition is not a Preapproval Program for purposes of the HMDA Rule.

Comment 2(b)-3.

If a Financial Institution does not regularly use procedures to consider requests but instead

considers requests on an ad hoc basis, the Financial Institution is not required to treat the ad

hoc requests as having been reviewed under a Preapproval Program. However, a Financial

Institution should be generally consistent in following uniform procedures for considering such

ad hoc requests. Comment 2(b)-3.

Under the HMDA Rule, a Financial Institution must collect, record, and report data regarding

an Application it receives if: (1) the Application did not result in the Financial Institution

originating a Covered Loan; and (2) the Financial Institution took action on the Application or

the applicant withdrew the Application while the Financial Institution was reviewing it. For

example, a Financial Institution reports information regarding an Application that it denied,

that it approved but the applicant did not accept, or that it closed for incompleteness.

12 CFR 1003.4(a) and 1003.5(a); comment 4(a)-1. If the Application results in the Financial

Institution originating a Covered Loan, the Financial Institution reports the Covered Loan, not

39 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the Application itself. For more information on reporting Applications when multiple entities

are involved, see Section 4.2.3.

Although requests under Preapproval Programs are Applications, a Financial Institution reports

data regarding a request under a Preapproval Program only if the preapproval request is denied

or approved but not accepted. A Financial Institution will also report a request under a

Preapproval Program that results in the Financial Institution originating a Home Purchase

Loan, but it will be reported as an originated Covered Loan. Comment 4(a)-1.ii.

A Financial Institution reports the data for an Application, including a reportable preapproval

request, on the LAR for the calendar year during which it takes action even if the Financial

Institution received the Application in a previous calendar year. Comment 4(a)-1.iv.

4.2.2 Originations and purchases of covered loans

A Financial Institution must collect, record, and report information regarding originations and

purchases of Covered Loans. For more information on when a Financial Institution reports the

origination or purchase of a Covered Loan when multiple entities are involved, see Section 4.2.3.

A purchase includes a repurchase of a Covered Loan, regardless of whether the Financial

Institution chose to repurchase the Covered Loan or was required to repurchase it because of a

contractual obligation, and regardless of whether the repurchase occurred within the same

calendar year that the Covered Loan was originated or in a different calendar year. Comment

4(a)-5.

A purchase does not include a temporary transfer of a Covered Loan to an interim funder or

warehouse creditor as part of an interim funding agreement under which the Financial

Institution that originated the Covered Loan is obligated to repurchase it for sale to a

subsequent investor. Such funding agreements are often referred to as “repurchase agreements”

and are sometimes used as the functional equivalents of warehouse lines of credit. Comment

4(a)-5.

4.2.3 Transactions involving multiple entities

Only one Financial Institution reports the origination of a Covered Loan. If more than one

institution is involved in the origination of a Covered Loan, the institution that makes the credit

decision approving the Application before loan closing or account opening is responsible for

40 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

reporting the origination of the Covered Loan. It is not relevant whether the loan closed in the

reporting Financial Institution’s name. If more than one institution approved an Application

prior to loan closing or account opening and one of those institutions purchased the Covered

Loan after closing or account opening, the institution that purchased the Covered Loan after

closing or account opening is responsible for reporting the origination of the Covered Loan.

Comment 4(a)-2.

If a Financial Institution reports a Covered Loan as an origination, it reports all of the

information required to be reported for the origination of a Covered Loan, even if the Covered

Loan was not initially payable to the Financial Institution that is reporting the Covered Loan as

an origination. Comment 4(a)-2. When reporting a Covered Loan as an origination, a Financial

Institution cannot rely on exceptions or exclusions that apply to purchased Covered Loans, but

that do not apply to originations of Covered Loans.

If a Financial Institution and other parties review the same Application and the Financial

Institution is not responsible for reporting the origination of the resulting Covered Loan, the

Financial Institution reports the actions that the Financial Institution took on the Application.

For example, the Financial Institution is still required to report the Application if the Financial

Institution denied the Application or if the Financial Institution approved the Application but

the applicant did not accept the loan. The Financial Institution is also required to report the

Application if the Financial Institution was reviewing the Application when it was withdrawn or

the file was closed for incompleteness. Comment 4(a)-2.ii.

If a Financial Institution makes a credit decision on a Covered Loan or Application through the

actions of an agent, the Financial Institution reports the Application or Covered Loan. State law

determines whether one party is the agent of another party. Comment 4(a)-4.

The following examples illustrate when a Financial Institution reports certain transactions

related to Covered Loans involving multiple entities.

41 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Examples: Ficus Bank receives an Application for a Covered Loan from an applicant and

forwards that Application to Pine Bank, which reviews and approves the Application prior

to closing. The loan closes in Ficus Bank’s name. Pine Bank purchases the loan from

Ficus Bank after closing. Pine Bank is not acting as Ficus Bank’s agent when it reviews

and approves the Application. Because Pine Bank made the credit decision prior to

closing, Pine Bank reports the transaction as an originated Covered Loan, not as a

purchased Covered Loan. Ficus Bank does not report the transaction.

Ficus Mortgage Company receives an Application for a Covered Loan from an applicant

and forwards that Application to Pine Bank, which reviews and denies the Application

before the loan would have closed. Pine Bank is not acting as Ficus Mortgage Company’s

agent when it reviews and denies the Application. Because Pine Bank makes the credit

decision, Pine Bank reports the Application as denied. Ficus Mortgage Company does not

report the Application. If, under the same facts, the Application is withdrawn before Pine

Bank makes a credit decision, Pine Bank reports the Application as withdrawn, and Ficus

Mortgage Company does not report the Application.

Ficus Bank receives an Application for a Covered Loan from an applicant and approves the

Application. Ficus Bank closes the loan in its name. Ficus Bank is not acting as Pine

Bank’s agent when it approves the Application or closes the loan. Pine Bank does not

review the Application before closing. Pine Bank purchases the Covered Loan from Ficus

Bank. Ficus Bank reports the loan as an originated Covered Loan. Pine Bank reports the

loan as a purchased Covered Loan.

Pine Bank reviews an Application and makes a credit decision to approve a Covered Loan

using the underwriting criteria provided by Ficus Mortgage Company. Pine Bank is not

acting as Ficus Mortgage Company’s agent, and no one acting on behalf of Ficus Mortgage

Company reviews the Application or makes a credit decision prior to closing. Pine Bank

reports the Application or, if the Application results in a Covered Loan, it reports the loan

as an originated Covered Loan. If the Application results in a Covered Loan and Ficus

Mortgage Company purchases it after closing, Ficus Mortgage Company reports the loan

as a purchased Covered Loan.

42 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

4.3 Partial exemptions

The 2018 Act created partial exemptions from

some of the HMDA Rule’s requirements. Only

certain Financial Institutions are eligible for

these partial exemptions, and only certain

Covered Loans and Applications are covered

under each of the two partial exemptions. If a

Covered Loan or Application is covered by a

partial exemption, the Financial Institution is

not required to collect, record, and report

specific data points. The partial exemptions

were effective May 24, 2018, and apply to the

collection, recording, and reporting of HMDA

data on or after that date.

As discussed in Section 4.3.1, only a Financial

Institution that is an insured credit union or an

insured depository institution is eligible for the

partial exemptions. Additionally, as discussed

in Section 4.3.1., an insured depository institution must not have a less than satisfactory

examination history under the Community Reinvestment Act (CRA) to be eligible for the partial

exemptions.

Because the partial exemptions were not

effective at the beginning of 2018, it is

possible that a Financial Institution may

have collected and recorded information that

it was not required to report with its 2018

HMDA data. If a Financial Institution that is

eligible for a partial exemption collected and

recorded data points that it is not required to

report due to a partial exemption, the

institution may choose to report all, some, or

none of those data points for a Covered Loan

or Application covered by a partial

exemption. If the institution opts to

voluntarily report a data point for a

transaction covered by a partial exemption, it

must report all data fields that are part of

that data point.

Examples (cont’d): Ficus Bank receives an Application for a Covered Loan and

forwards it to Aspen Bank and Pine Bank. Ficus Bank makes a credit decision, acting as

Elm Bank’s agent, and approves the Application. Pine Bank makes a credit decision and

denies the Application. Aspen Bank makes a credit decision approving the Application.

The applicant does not accept the loan from Elm Bank. The applicant accepts the loan

from Aspen Bank and credit is extended. Aspen Bank reports the loan as an originated

Covered Loan. Pine Bank reports the Application as denied. Elm Bank reports the

Application as approved but not accepted. Ficus Bank does not report the Application.

43 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

As discussed in Section 4.3.2, each of the partial exemptions applies only to certain Covered

Loans and Applications and only if an applicable loan-volume threshold is met. An insured

depository institution or insured credit union must meet the applicable loan-volume threshold

for Closed-End Mortgage Loans in order for a partial exemption to apply to its Closed-End

Mortgage Loan transactions, and the applicable loan-volume threshold for Open-End Lines of

Credit in order for a partial exemption to apply to its Open-End Line of Credit transactions.

The 2018 Act created partial exemptions, not complete exclusions. Therefore, if a Covered Loan

or Application is covered by a partial exemption, the Financial Institution is required to collect,

record, and report 22 data points, but is exempt from collecting, recording, and reporting 26

data points for that transaction. Additionally, the Financial Institution may voluntarily report

any or all of these 26 data points for a Covered Loan or Application covered by a partial

exemption. Section 4.3.3 discusses the scope of the partial exemptions and includes tables that

list the data points that are and are not required to be collected, recorded, and reported if a

partial exemption applies to a Covered Loan or Application.

4.3.1 Eligible Financial Institutions

In order to be eligible for a partial exemption, a Financial Institution must be an:

1. “Insured credit union” as defined in Section 101 of the Federal Credit Union Act, 12

U.S.C. 1752; or

2. “Insured depository institution” as defined in Section 3 of the Federal Deposit Insurance

Act, 12 U.S.C. 1813. 12 C.F.R. 1003.3(d)(1)(i) and (ii).

Additionally, a Financial Institution that satisfies the definition of “insured depository

institution” must not have a negative CRA examination history in order to be eligible for a

partial exemption. More specifically, an insured depository institution must not have received

either of the following:

1. A rating of “need to improve record of meeting community credit needs” during each of

its two most recent examinations under Section 807(b)(2) of the CRA; or

2. A rating of “substantial noncompliance in meeting community credit needs” on its most

recent examination under Section 807(b)(2) of the CRA.

44 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The CRA ratings used to determine if an insured depository institution is eligible for a partial

exemption are the institution’s two most recent ratings as of December 31 of the preceding year.

A Financial Institution that does not satisfy either the definition of an “insured credit union” or

an “insured depository institution” may not rely on either of the partial exemptions, even if it

satisfies the loan-volume thresholds discussed in Section 4.3.2. Similarly, an insured depository

institution that does not satisfy the criteria regarding CRA examination history cannot rely on

either of the partial exemptions.

4.3.2 Loan-volume thresholds

In order for a partial exemption to apply to an Application or Covered Loan (including a

purchased Covered Loan), an eligible Financial Institution (i.e., an insured depository

institution that does not have a negative

CRA examination history or an insured

credit union) must also meet the applicable

loan-volume threshold.

A partial exemption applies to an eligible

Financial Institution’s Applications for,

originations of, and purchases of Closed-

End Mortgage Loans if the institution

originated fewer than 500 Closed-End

Mortgage Loans in each of the two

preceding calendar years.

A partial exemption applies to an eligible

Financial Institution’s Applications for,

originations of, and purchases of Open-End Lines of Credit if the institution originated fewer

than 500 Open-End Lines of Credit in each of the two preceding calendar years. However,

during 2018, 2019, 2020, and 2021, a Financial Institution is not required to collect or report

any information for Open-End Lines of Credit if the institution originated fewer than 500 Open-

End Lines of Credit during either of the two preceding calendar years. This is because, during

2018, 2019, 2020, and 2021, Open-End Lines of Credit are Excluded Transactions for a

Financial Institution that originated fewer than 500 of them during either of the two preceding

calendar years. See the discussion regarding Excluded Transactions in Section 4.1.2.

When a Financial Institution determines

whether it meets the loan-v olume t hresholds,

it does not count transactions excluded by

12 CFR 1003.3(c)(1) through (10) a nd

(13). 12 CFR 1003.2(g)(2)(ii). These

Excluded Transactions are discussed in

Section 4.1.2 in paragraphs 1 through 10 and

paragraph 13. When determining if it meets

either of the loan-volume thresholds, a

Financial Institution only counts Closed-End

Mortgage Loans or Open-End Lines of

Credit, as applicable, that it originated.

45 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The partial exemption for Closed-End Mortgage Loans and the partial exemption for Open-End

Lines of Credit operate independently of one another. Thus, in a given calendar year, an eligible

Financial Institution may be able to rely on one partial exemption but not the other.

4.3.3 Collecting, recording, and reporting for transactions

covered by a partial exemption

If a partial exemption applies to a Covered Loan or Application (as discussed above), the HMDA

Rule does not require the Financial Institution to collect, record, and report some of the data

points that the HMDA Rule would otherwise require the institution to collect, record, and report

for that transaction. More specifically, if a partial exemption applies to a Covered Loan or

Application, a Financial Institution is not required under the HMDA Rule to collect, record, or

report the 26 data points listed in the table immediately below.

Example: Ficus Bank is an insured depository institution as defined in Section 3 of the

Federal Deposit Insurance Act, and it received satisfactory ratings in its two most recent

CRA examinations as of December 31, 2017. In 2016, Ficus Bank originated 400 Closed-

End Mortgage Loans and 510 Open-End Lines of Credit. In 2017, Ficus Bank originated

490 Closed-End Mortgage Loans and 515 Open-End Lines of Credit. In 2018, a partial

exemption applies to Ficus Bank’s Closed-End Mortgage Loan transactions, but a partial

exemption does not apply to Ficus Bank’s Open-End Line of Credit transactions.

Additionally, because Ficus Bank originated at least 500 Open-End Lines of Credit in

both 2016 and 2017, Ficus Bank cannot exclude Open-End Lines of Credit from its

reportable transactions in 2018 (i.e., they are not Excluded Transactions as discussed in

Section 4.1.2).

46 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution may opt to collect, record, and report one or more of these 26 data points

for a Covered Loan or Application that is covered by a partial exemption.

If the Financial Institution chooses not to report a ULI for a Covered Loan or Application covered by a partial

exemption, it must report a non-universal loan identifier as discussed in Section 5.2.

Certain Financial Institutions supervised by the OCC and the FDIC are required by those agencies to report reasons

for denial on their HMDA loan/application registers, even if a partial exemption applies. 12 CFR 27.3(a)(1)(i),

128.6, 390.147.

Data Points Eligible Financial Institutions Need Not Collect or Report under the HMDA

Rule For Transactions Covered by a Partial Exemption

• Universal Loan Identifier (ULI) (1003.4(a)(1)(i))

• Application Channel (1003.4(a)(33))

• Loan Term (1003.4(a)(25))

• Reasons for Denial (1003.4(a)(16))

• Property Address (1003.4(a)(9)(i))

• Manufactured Home Secured Property Type (1003.4(a)(29))

• Manufactured Home Land Property Interest (1003.4(a)(30))

• Property Value (1003.4(a)(28))

• Multif amily Affordable Units (1003.4(a)(32))

• Debt-to-Income Ratio (1003.4(a)(23))

• Combined Loan-to-Value Ratio (1003.4(a)(24))

• Credit Score (1003.4(a)(15))

• Automated Underwriting System (1003.4(a)(35))

• Interest Rate (1003.4(a)(21))

• Introductory Rate Period (1003.4(a)(26))

• Rate Spread (1003.4(a)(12))

• Non-Amortizing Features (1003.4(a)(27))

• Total Loan Costs or Total Points and Fees (1003.4(a)(17))

• Origination Charges (1003.4(a)(18))

• Discount Points (1003.4(a)(19))

• Lender Credits (1003.4(a)(20))

• Prepayment Penalty Term (1003.4(a)(22))

• Reverse Mortgage Flag (1003.4(a)(36))

• Open-End Line of Credit Flag (1003.4(a)(37))

• Business or Commercial Purpose Flag (1003.4(a)(38))

• Mortgage Loan Originator Identifier (1003.4(a)(34))

47 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Seven of these 26 data points (i.e.,

property address, credit score, reasons for

denial, total loan costs or total points and

fees, non-amortizing features,

application channel, and automated

underwriting system) have multiple data

fields. If a Financial Institution opts to

report a data point with multiple fields, it

must report all of the data fields that

make up that data point.

If a Financial Institution opts not to report a Universal Loan Identifier (ULI) for a Covered Loan

or Application that is covered by a partial exemption, the institution must provide a non-

universal loan identifier as discussed in Section 5.2.

If a Financial Institution opts not to report one of the 26 data points other than the ULI, the

Financial Institution generally reports that the Covered Loan or Application is exempt from that

data point. However, if a data point is not applicable to the particular transaction and the

transaction is exempt from that data point, the Financial Institution may choose to report either

that the data point is not applicable or that the transaction is exempt from the data point.

Property address is one of the data points

that a Financial Institution is not required to

report if a partial exemption applies to a

transaction. If a partial exemption applies

to a Covered Loan or Application, an

institution may report state for the

transaction without reporting the other data

fields that make up the property address

data point (i.e., street address, city, and zip

code). Comment 3(d)(4)(i)-1.

Example: Ficus Bank originates a Covered Loan. A partial exemption applies to the

Covered Loan, but Ficus Bank opts to report that the Covered Loan does not have a

balloon payment. Balloon payment is one of the data fields for the non-amortizing

features data point. The other data fields that make up the non-amortizing features data

point are interest-only payments, negative amortization, and other non-amortizing

features. Because Ficus Bank chose to report the balloon payment data field, Ficus Bank

must also report whether the Covered Loan has interest-only payments, negative

amortization, and other non-amortizing features.

48 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If a Covered Loan or Application is covered by a partial exemption, a Financial Institution must

collect, record, and report 22 data points for the Covered Loan or Application. These 22 data

points are set forth in the following table.

Because the partial exemptions do not affect these 22 data points, Financial Institutions must

continue to collect and report these 22 data points for Covered Loans and Applications in the

manner specified in the 2015 HMDA Rule, as amended and clarified by the 2017 HMDA Rule.

Data Points That Must be Collected and Reported under the HMDA Rule for Covered

Loans and Applications Covered by a Partial Exemption

• Ethnicity (1003.4(a)(10)(i))

• Race (1003.4(a)(10)(i))

• Sex (1003.4(a)(10)(i))

• Age (1003.4(a)(10)(ii))

• Income (1003.4(a)(10)(iii))

• Legal Entity Identifier (LEI) (1003.5(a)(3))

• Application Date (1003.4(a)(1)(ii)

• Preapproval (1003.4(a)(4))

• Loan Type (1003.4(a)(2))

• Loan Purpose (1003.4(a)(3))

• Loan Amount (1003.4(a)(7))

• Action Taken (1003.4(a)(8)(i))

• Action Taken Date (1003.4(a)(8)(ii))

• State (1003.4(a)(9)(ii)(A))

• County (1003.4(a)(9)(ii)(B))

• Census Tract (1003.4(a)(9)(ii)(C))

• Construction Method (1003.4(a)(5))

• Occupancy Type (1003.4(a)(6)

• Lien Status (1003.4(a)(14))

• Number of Units (1003.4(a)(31))

• HOEPA Status (1003.4(a)(13))

• Type of Purchaser (1003.4(a)(11))

Example: Ficus Bank originates a Covered Loan. The sole applicant for the Covered

Loan is not a natural person. Because the applicant is not a natural person, Ficus Bank

would report the debt-to-income ratio data point as not applicable, unless a partial

exemption applies to the Covered Loan. If a partial exemption applies to the Covered

Loan, Ficus Bank could report either “not applicable” or “exempt” for the debt-to-income

ratio data point.

49 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

As discussed above, during 2018,2019, 2020, and 2021, a Financial Institution is not required to

collect or report any information for Open-End Lines of Credit if the institution originated fewer

than 500 of them during either of the two preceding calendar years. See the discussion

regarding Excluded Transactions in Section 4.1.2.

For more information on reporting data points if a Covered Loan or Application is covered by a

partial exemption, see Section 5 of this guide and the Filing Instructions Guide that incorporates

the 2018 HMDA Rule available at

http://www.consumerfinance.gov/data-research/hmda/for-

filers.

50 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5. Reportable data

The HMDA Rule changes the data that must be collected, recorded, and reported for Covered

Loans and Applications. Effective January 1, 2018, it modifies some existing data points and

adds new data points. 12 CFR 1003.4. Effective May 24, 2018, a Financial Institution is not

required to collect, record, or report some of the data points under the HMDA Rule for Covered

Loans and Applications covered by a partial exemption. The partial exemptions, including the

data points that need not be collected, recorded, or reported for a Covered Loan or Application

covered by a partial exemption, are discussed in Section 4.3.

Unless a partial exemption applies, a Financial Institution collects, records, and reports the new

and modified data points under the HMDA Rule for Applications and Covered Loans on which

final action is taken on or after January 1, 2018. A Financial Institution collects, records, and

reports the new and modified data points, to the extent that they apply to purchased loans, for

purchases of Covered Loans that occur on or after January 1, 2018.

If a partial exemption applies to a Covered Loan or Application, the Financial Institution is not

required to collect, record, or report 26 data points for that transaction as described in Section

4.3.3. It must collect, record, and report the remaining 22 data points as required under the

HMDA Rule and as discussed in Section 4.3.3.

This section describes the HMDA Rule’s reportable data points and provides guidance on how to

report them. For more information on reporting Covered Loans and Applications covered by a

partial exemption, see Section 4.3.3. Additional instructions for reporting data points are

available in the Filing Instructions Guides at

http://www.consumerfinance.gov/data-

research/hmda/for-filers.

5.1 Applicant information

A Financial Institution must report information about ethnicity, race, and sex for applicants who

are natural persons. Appendix B to Regulation C provides instructions on how to collect

ethnicity, race, and sex information. The HMDA Rule modifies the requirements for collecting

and reporting an applicant’s ethnicity, race, and sex and requires that the applicant’s age be

collected and reported. Financial Institutions will continue to collect and report income.

51 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The HMDA Rule amends the instructions in appendix B and provides a new sample data

collection form.

5.1.1 Collection

The instructions in appendix B to the HMDA Rule require a Financial Institution:

1. To ask an applicant for ethnicity, race, and sex information regardless of whether the

Application is taken in person, by mail, by telephone, or on the internet. A Financial

Institution cannot require the applicant to provide this information.

When a Financial Institution requests ethnicity and race information from an applicant

under the HMDA Rule, it must offer the applicant the option of selecting more than one

ethnicity and race and must permit the applicant to self-identify using aggregate categories

and disaggregated subcategories. When a Financial Institution requests the applicant’s

ethnicity and race, the aggregate categories must be broken down into disaggregated

subcategories. For example, the aggregate category of Hispanic or Latino must be broken

down into the subcategories of Mexican, Puerto Rican, Cuban, or Other Hispanic or Latino.

Similarly, the Asian and Native Hawaiian or Other Pacific Islander categories also must be

broken down into their respective disaggregated subcategories.

An applicant must be permitted to select one or more race or ethnicity subcategories even if

the applicant has not selected a race or ethnicity aggregate category. For example, an

applicant could select Mexican even if the applicant has not selected Hispanic or Latino.

The applicant must also be permitted to provide certain additional information. For

example, an applicant must be permitted to provide a particular Hispanic or Latino ethnicity

that is not provided on the collection form. An applicant must be permitted to provide this

information even if the applicant has not selected the Other Hispanic or Latino category.

Similarly, the applicant must be permitted to provide a particular Asian race or a particular

Pacific Islander race that is not provided on the collection form. An applicant must be

permitted to provide this information even if the applicant has not selected the Other Asian

or Other Pacific Islander category. An applicant must also be permitted to provide a

particular American Indian or Alaska Native enrolled or principal tribe even if the applicant

has not selected the American Indian or Alaska Native race category. Appendix B to

Part 1003.

For an illustration of the information that a Financial Institution must ask about an

applicant’s ethnicity, race, and sex, see the sample data collection form in Attachment A

52 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. To inform the applicant that: (a) Federal law requires the information be collected in order

to protect consumers and to monitor compliance with Federal statutes that prohibit

discrimination against applicants; and (b) if the information is not provided where the

Application is taken in person, the Financial Institution is required to note the information

on the basis of visual observation or surname.

3. To collect the applicant’s ethnicity, race, and sex based on visual observation or surname if

the applicant chooses not to provide the information for an Application that is taken in

person. Appendix B to Part 1003.

For an Application taken in person, there are special requirements if the applicant declines

to provide the information regarding ethnicity, race, and sex. The Financial Institution must

note that the applicant did not provide the information and then collect the applicant’s

ethnicity, race, and sex on the basis of visual observation or surname. When a Financial

Institution collects an applicant’s ethnicity, race, and sex on the basis of visual observation

or surname, the Financial Institution must select from the following aggregate categories:

ethnicity (Hispanic or Latino; not Hispanic or Latino); race (American Indian or Alaska

Native; Asian; Black or African American; Native Hawaiian or Other Pacific Islander;

White); sex (male; female). The Financial Institution does not use the disaggregated

categories. Only an applicant may self-identify as being of a particular ethnic or racial

subcategory.

If a Financial Institution accepts an Application through electronic media with a video

component, it must treat the Application as taken in person. However, if a Financial

Institution accepts an Application through electronic media without a video component, it

must treat the Application as accepted by mail. Appendix B to Part 1003.

If the applicant (1) begins an Application by mail, internet, or telephone, (2) does not

provide the requested information, (3) does not select “I do not wish to provide this

information,” and (4) meets with the Financial Institution in person to complete the

Application, the Financial Institution must request the applicant’s ethnicity, race, and sex

when the Financial Institution meets with the applicant in person. If the applicant does not

provide the requested information during the in-person meeting, the Financial Institution

must collect the information on the basis of visual observation or surname. If the meeting

occurs after the Application process is complete (e.g., at loan closing or account opening),

the Financial Institution is not required to obtain the applicant’s ethnicity, race, and sex.

Appendix B to Part 1003.

A Financial Institution may collect the required information regarding the ethnicity, race, and

sex of an applicant on an Application form, or on a separate form that refers to the Application

53 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

(sometimes called a collection form). For Applications taken by telephone, a Financial

Institution must state the information in the collection form orally. Appendix B to Part 1003.

Because the HMDA Rule changes the information that must be included on an Application form

or other collection form, Financial Institutions must revise their forms. A Financial Institution

must use a revised collection or Application form that includes the disaggregated categories for

Applications received on or after January 1, 2018. For more information on collecting the

applicant’s ethnicity, race, and sex, see appendix B to the HMDA Rule.

5.1.2 Reporting

A Financial Institution reports the following information about an applicant:

1. Ethnicity, race, and sex. A Financial Institution must report the applicant’s ethnicity,

race, and sex. It must also report whether or not it collected this information on the basis of

visual observation or surname. 12 CFR 1003.4(a)(10)(i).

If an applicant provided the requested information, a Financial Institution must report the

ethnicity, race, and sex information that the applicant provided. If an applicant selected

more than one ethnicity or race, a Financial Institution must report each designation the

applicant selected, subject to the limits in appendix B, which are described below.

For ethnicity, a Financial Institution must report every aggregate ethnicity category that the

applicant selected. If the applicant also selected one or more ethnicity subcategories, the

Financial Institution must report each ethnicity subcategory that the applicant selected, up

to a combined total of five aggregate ethnicity categories and ethnicity subcategories.

Appendix B to Part 1003.

54 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For race, a Financial Institution must report every aggregate race category the applicant

selected. If the applicant also selected one or more race subcategories, a Financial

Institution must report each race subcategory the applicant selected, up to a combined total

of five aggregate race categories and race subcategories. Appendix B to Part 1003.

An applicant may select the Other Hispanic or Latino ethnicity subcategory, an applicant

may provide a particular Hispanic or Latino ethnicity not listed in the standard

subcategories, or an applicant may do both. If an applicant provides only a particular

ethnicity not listed in the standard subcategories, a Financial Institution is permitted, but

not required, to report both the selection of Other Hispanic or Latino in addition to the

particular ethnicity that the applicant provided. If an applicant selects Other Hispanic or

Latino and provides a particular ethnicity, the Financial Institution reports both Other

Hispanic or Latino and the particular ethnicity the applicant provided, (subject to the five

ethnicity maximum described above). For purposes of the maximum of five reportable

ethnicity categories and subcategories, the Other Hispanic or Latino subcategory and any

additional information provided by the applicant together constitute only one selection.

Appendix B to Part 1003.

Examples: An applicant selects all five aggregate race categories (i.e., American

Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other

Pacific Islander, and White) and also selects the Chinese race subcategory. Because a

Financial Institution must report all of the aggregate race categories that an applicant

selects and can only report a combined total of up to five aggregate race categories and

race subcategories, Ficus Bank reports only the five aggregate race categories. It does

not report the Chinese race subcategory.

An applicant selects the White, Asian, and Native Hawaiian or Other Pacific Islander

aggregate race categories, and the Korean, Vietnamese, and Samoan race subcategories.

The Financial Institution must report the White, Asian, and Native Hawaiian or Other

Pacific Islander aggregate race categories. The Financial Institution also reports two of

the three race subcategories. The Financial Institution chooses which two race

subcategories to report (i.e., Korean and Vietnamese, Korean and Samoan, or

Vietnamese and Samoan).

55 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

An applicant may select the Other Asian race subcategory or Other Pacific Islander race

subcategory, an applicant may provide a particular race not listed in the standard

subcategories, or an applicant may do both. If an applicant provides only a particular race

not listed in the standard subcategories, a Financial Institution is permitted, but not

required, to report both the selection of Other Asian or Other Pacific Islander, as applicable,

in addition to the particular race that the applicant provided. If an applicant selects Other

Asian or Other Pacific Islander and provides a particular race, the Financial Institution

reports both Other Asian or Other Pacific Islander, as applicable, and the additional

information the applicant provided, subject to the maximum of five. For purposes of the

maximum of five reportable race categories and race subcategories, the Other Asian race or

Other Pacific Islander race subcategory and additional information provided by the

applicant together constitute only one selection. Appendix B to Part 1003.

If an applicant selected “I do not wish to provide this information” on a collection or

Application form taken by mail or on the internet or stated that he or she did not wish to

provide the information for an Application that is taken by telephone, the Financial

Institution reports that the information was not provided in a mail, internet, or telephone

application.

Examples: An applicant selects the category of Hispanic or Latino and provides

Dominican as an ethnicity not listed in the standard subcategories. The applicant does

not select the Other Hispanic or Latino subcategory or any other ethnicity categories or

subcategories. The Financial Institution reports the Hispanic or Latino category and

Dominican. It may also report the Other Hispanic or Latino subcategory, but is not

required to do so.

An applicant selects the White, Asian, and Native Hawaiian or Other Pacific Islander

aggregate race categories, as well as the Korean, Vietnamese, Samoan, and Other Asian

race subcategories and writes in “Thai” in the space provided on the Application form.

The Financial Institution reports two (at its option) of the four race subcategories selected

by the applicant (i.e., Korean, Vietnamese, Other Asian-Thai, Samoan) in addition to the

three aggregate race categories selected by the applicant.

56 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If an applicant provided some but not all of the requested information, a Financial

Institution reports the information provided by the applicant, whether partial or complete.

If an applicant provided complete or partial information but also selected that he or she did

not wish to provide the information for an Application that is taken by mail, internet, or

telephone, a Financial Institution reports the ethnicity, race, and sex information that the

applicant provided. Appendix B to Part 1003.

If there are multiple applicants (i.e., an applicant and one or more co-applicants), the

Financial Institution reports the ethnicity, race, and sex information for the applicant and

the first co-applicant listed on the collection or Application form. If an applicant did not

provide the information for an absent co-applicant, the Financial Institution reports that the

information was not provided by applicant in mail, internet, or telephone Application for the

absent co-applicant. If there is only one applicant, a Financial Institution reports that there

is no co-applicant. Appendix B to Part 1003.

If a Covered Loan or Application includes a guarantor, a Financial Institution does not

report the guarantor’s ethnicity, race, and sex. Appendix B to Part 1003.

A Financial Institution may, but is not required to, report an applicant’s ethnicity, race, and

sex for purchased Covered Loans. If a Financial Institution chooses not to report the

applicant’s ethnicity, race, and sex for a purchased Covered Loan, the Financial Institution

reports that the data points are not applicable. Appendix B to Part 1003.

If an applicant is not a natural person (e.g., a corporation, partnership, or trust), a Financial

Institution reports that the requirement to report ethnicity, race, and sex information is not

applicable. However, if an applicant is a natural person and a beneficiary of a trust (for

example, the natural person might be relying on income from or collateral owned by a trust),

the Financial Institution reports the applicant’s ethnicity, race, and sex information.

Appendix B to Part 1003.

For more information on reporting an applicant’s ethnicity, race, and sex, see appendix B to

the HMDA Rule.

2. Age. A Financial Institution reports the applicant’s age (as of the Application date) as the

number of whole years derived from the date of birth shown on the Application form.

12 CFR 1003.4(a)(10)(ii); comment 4(a)(10)(ii)-1.

57 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If there are multiple applicants, the Financial Institution reports the age for the applicant

and the first co-applicant listed on the Application form. If a Covered Loan or Application

includes a guarantor, a Financial Institution does not report the guarantor’s age. Comments

4(a)(10)(ii)-2 and -5.

A Financial Institution may, but is not required to, report the age of an applicant for

purchased Covered Loans. If a Financial Institution chooses not to report the applicant’s age

for a purchased Covered Loan, the Financial Institution reports that the data point is not

applicable. 12 CFR 1003.4(b)(2); comment 4(a)(10)(ii)-3.

If an applicant is not a natural person (e.g., a corporation, partnership, or trust), a financial

institution reports that the data point is not applicable. Comment 4(a)(10)(ii)-4. However,

if an applicant is a natural person and a beneficiary of a trust (for example, the natural

person might be relying on income from or collateral owned by a trust), the Financial

Institution reports the applicant’s age.

3. Income. If a Financial Institution considers income in making its credit decision, it reports

the gross annual income that it relied on in making the credit decision.

12 CFR 1003.4(a)(10)(iii). For Applications that are withdrawn or closed for incompleteness

before the Financial Institution makes a credit decision that would have taken income into

consideration, the Financial Institution reports the income information relied on in

processing the Application at the time that the Application was withdrawn or the file was

closed for incompleteness. 12 CFR 1003.4(a)(10)(iii); comment 4(a)(10)(iii)-5.

If a Financial Institution relies on only a portion of an applicant’s income in its

determination, it reports only the portion of income relied on. Comment 4(a)(10)(iii)-1. If a

Financial Institution relies on the income of a co-applicant or cosigner to evaluate

creditworthiness, the Financial Institution includes the co-applicant’s or cosigner’s income

to the extent relied upon. Comments (a)(10)(iii)-1 and -2. A Financial Institution, however,

does not include the income of a guarantor who is only secondarily liable. Comment

4(a)(10)(iii)-1.

Example: An applicant provides a date of birth of 01/15/1970 on the Application form

that Ficus Bank receives on 01/14/2018. Ficus Bank reports 47 as the applicant’s age.

58 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Reportable income does not include funds or amounts in addition to income, such as funds

derived from underwriting calculations of the potential annuitization or depletion of an

applicant’s remaining assets, even if the Financial Institution relied on them when making

the credit decision. Actual distributions from retirement accounts or other assets that are

relied on by the Financial Institution as income are reported as income. Comment

4(a)(10)(iii)-4.

A Financial Institution may, but is not required to, report an applicant’s income for

purchased Covered Loans. A Financial Institution reports that the data point is not

applicable if it chooses not to report the applicant’s income. Comment 4(a)(10)(iii)-9.

A Financial Institution reports that the income data point is not applicable:

a. For a Covered Loan to or an Application from a Financial Institution’s own employee,

even though the Financial Institution relied on the employee’s income in making its

credit decision;

b. For a Covered Loan that is secured by or an Application that was proposed to be secured

by a Multifamily Dwelling;

c. If the applicant or co-applicant, if applicable, is not a natural person (e.g., a corporation,

partnership, or trust); or

d. If the Financial Institution did not consider or would not have considered income in

making the credit decision. 12 CFR 1003.4(a)(10)(iii); comments 4(a)(10)(iii)-3, -6, -7,

and -8.

5.2 Universal loan identifier (ULI) or non-

universal loan identifier

Unless a partial exemption applies, a Financial Institution must report a ULI for a Covered Loan

or Application. The ULI:

1. Is a number that a Financial Institution assigns to the Covered Loan or Application.

12 CFR 1003.4(a)(1)(i).

59 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. Must begin with the Financial Institution’s Legal Entity Identifier (LEI),

followed by up

to 23 additional letters and/or numbers that the Financial Institution assigns, and end

with a two-character check digit.

12 CFR 1003.4(a)(1)(i)(A)-(C). Essentially, the ULI is

the Financial Institution’s LEI plus a loan or application number plus the two-character

check digit (in that order).

3. Cannot include information that could be used to identify the applicant or borrower

directly, such as the applicant’s or borrower’s name, date of birth, Social Security

number, official government-issued driver’s license or identification number, alien

registration number, government passport number, or employer or taxpayer

identification number. Comment 4(a)(1)(i)-2.

4. Must be unique within the Financial Institution and must be used for only one Covered

Loan or Application. Comment 4(a)(1)(i)-1.

To ensure that a ULI is unique within a Financial Institution, the Financial Institution must:

1. Ensure that its branches do not use the same ULI to refer to multiple Covered Loans or

Applications.

2. Assign a new ULI to a Refinancing or Application for Refinancing (i.e., not use the ULI

from the loan that is being refinanced).

A Financial Institution may use a previously reported ULI if an applicant asks the Financial

Institution: (a) to reinstate a counteroffer that the applicant did not accept earlier in the same

calendar year; or (b) to reconsider an Application that was denied, withdrawn, or closed for

incompleteness earlier during the same calendar year. However, a Financial Institution must

The LEI is a unique, 20-digit alphanumeric identifier issued by a utility endorsed by the LEI Regulatory Oversight

Committee or endorsed or otherwise governed by the Global LEI Foundation or a successor organization. A

Financial Institution can go to the Global LEI Foundation website,

https://www.gleif.org/services/lou-

services/issue-new-lei, to obtain an LEI. Regardless of whether a Financial Institution’s transactions are covered by

a partial exemption, effective January 1, 2019, the institution must include an LEI with its submission as described

in 12 CFR 1003.5(a)(3). See Section 6.2 for more informati on.

The two-character check digit is used to validate the ULI. It is calculated using certain standards published by the

International Organization for Standardization (www.iso.org

). A check digit tool is available on the Bureau’s

website. For more information on the two-character check digit, including the methodology for generating a check

digit, see appendix C to the HMDA Rule.

60 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

not use a previously reported ULI if it reinstates or reconsiders an Application that was reported

in a prior calendar year. 12 CFR 1003.4(a)(1)(i)(E); comment 4(a)(1)(i)-4.

For a purchased Covered Loan, a Financial Institution uses the ULI that was assigned to the

Covered Loan by the Financial Institution that previously reported the Covered Loan. 12 CFR

1003.4(a)(1)(i)(D). If the Financial Institution that originated the Covered Loan did not assign a

ULI, the Financial Institution that purchases the Covered Loan must assign a ULI, unless a

partial exemption applies with respect to the purchase of the Covered Loan.

If a partial exemption applies to a Covered

Loan or Application, a Financial Institution

may either report a ULI for the transaction,

as discussed above, or report a non-

universal loan identifier for the transaction,

as discussed below.

A non-universal loan identifier:

1. Is assigned by a Financial Institution

to a Covered Loan or Application that is covered by a partial exemption.

2. Is composed of up to 22 characters (i.e., letters, numerals, or a combination of letters and

numerals). A non-universal loan identifier may, but is not required to, include a check

digit. However, the non-universal loan identifier cannot be more than 22 characters,

including any check digit.

3. Cannot include information that could be used to identify the applicant or borrower

directly, such as the applicant’s or borrower’s name, date of birth, Social Security

number, official government-issued driver’s license or identification number, alien

registration number, government passport number, or employer or taxpayer

identification number.

4. Must be unique within the annual loan/application register in which the Covered Loan or

Application is included.

To ensure that a non-universal loan identifier is unique within a Financial Institution, the

Financial Institution must:

If a Financial Institution that is not eligible

for a partial e xemption purchases a Covered

Loan for which an insured depository

institution or insured credit union has

assigned a non-universal loan identifier, the

purchasing Financial Institution does not

report that non-universal loan identifier.

Instead, the purchasing Financial Institution

assigns its own ULI.

61 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

1. Ensure that its branches do not use the same non-universal loan identifier to refer to

multiple Covered Loans or Applications.

2. Assign only one non-universal loan identifier to any particular Covered Loan or

Application. Each non-universal loan identifier must correspond to a single Application

and ensuing Covered Loan, if any.

3. Assign a new non-universal loan identifier to a Refinancing or Application for

Refinancing (i.e., not use the non-universal loan identifier or ULI from the loan that is

being refinanced). 12 CFR 1003.3(d)(5); comments 3(d)(5)-1, -2.

5.3 Application date

Except for a purchased Covered Loan, a Financial Institution reports the Application date,

which is reported as either the date that the Application was received or the date on the

Application form. 12 CFR 1003.4(a)(1)(ii). Although a Financial Institution need not choose the

same approach for reporting Application date for its entire HMDA submission, it should be

generally consistent, such as by routinely using one approach within a particular division of the

Financial Institution or for a category of loans. Comment 4(a)(1)(ii)-1.

If a Financial Institution chooses to report the date shown on the Application form and the

Financial Institution retains multiple versions of the form, the Financial Institution reports the

date shown on the first form it received that constitutes an Application under the HMDA Rule.

Comment 4(a)(1)(ii)-1.

For an Application that was not submitted directly to the Financial Institution, the Financial

Institution may report the date the Application was received by the party that initially received

the Application, the date the Application was received by the Financial Institution, or the date

shown on the Application form. Comment 4(a)(1)(ii)-2.

If, within the same calendar year, an applicant asks a Financial Institution to reinstate a

counteroffer that the applicant previously did not accept (or asks the Financial Institution to

reconsider an Application that was denied, withdrawn, or closed for incompleteness), the

reportable Application date depends on whether the Financial Institution reports the request as

the continuation of the earlier transaction using the earlier transaction’s ULI or non-universal

loan identifier (as applicable) or as a new transaction with a new ULI or non-universal loan

62 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

identifier (as applicable). If the Financial Institution treats the request for reinstatement or

reconsideration as a new transaction, it reports the date of the request as the Application date.

If the Financial Institution does not treat the request for reinstatement or reconsideration as a

new transaction, it reports the original Application date. Comment 4(a)(1)(ii)-3.

For a purchased Covered Loan, a Financial Institution reports that this data point is not

applicable. 12 CFR 1003.4(a)(1)(ii).

5.4 Application channel

A Financial Institution reports the application channel in the manner described below unless a

partial exemption applies. If a partial exemption applies, see Section 4.3.3.

Except for purchased Covered Loans, a Financial Institution reports both of the following:

1. Whether or not the applicant or borrower submitted the Application directly to

the Financial Institution. 12 CFR 1003.4(a)(33)(i). For example, the Application was

submitted directly to the Financial Institution if the mortgage loan originator identified in

the data point required by 12 CFR 1003.4(a)(34) and discussed in Section 5.30 was the

reporting Financial Institution’s employee when the originator performed the origination

activities for the Covered Loan or Application. The Application was also submitted directly

to the Financial Institution if the Financial Institution directed the applicant to a third-party

agent (e.g., a credit union service organization) that performed loan origination activities on

behalf of the reporting Financial Institution and the third-party agent did not assist the

applicant with applying for Covered Loans with other institutions. Comment 4(a)(33)(i)-1.

If an applicant contacted and completed an Application with a broker or correspondent that

forwarded the Application to the Financial Institution for approval, the Application was not

submitted directly to the Financial Institution. Comment 4(a)(33)(i)-1.iii.

2. Whether or not the obligation arising from the Covered Loan or Application

was or would have been initially payable to the Financial Institution.

12 CFR 1003.4(a)(33)(ii). An obligation was initially payable to the Financial Institution if

the obligation was initially payable on the face of the note or contract to the Financial

Institution that is reporting the Covered Loan or Application. Comment 4(a)(33)(ii)-1. For

an Application that is withdrawn, denied, or closed for incompleteness, a Financial

Institution reports that the requirement is not applicable if the Financial Institution had not

63 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

determined, at the time it took final action on the Application, whether the loan would be

initially payable to the Financial Institution. Comment 4(a)(33)(ii)-2.

For purchased Covered Loans, a Financial Institution reports that this data point is not

applicable. 12 CFR 1003.4(a)(33).

5.5 Preapproval request

A Financial Institution reports whether or not the Application or Covered Loan involved a

preapproval request for a Home Purchase Loan under a Preapproval Program.

12 CFR 1003.4(a)(4). For all of the following, a Financial Institution reports that the

Application or Covered Loan did not involve a preapproval request: a purchased Covered Loan;

an Open-End Line of Credit or Application for an Open-End Line of Credit; a Reverse Mortgage

or an Application for a Reverse Mortgage; an Application for a Covered Loan that is denied; an

Application that is closed for incompleteness or withdrawn; an Application or Covered Loan for

any purpose other than Home Purchase Loan; and for a Covered Loan secured by a Multifamily

Dwelling. Comment 4(a)(4)-2.

5.6 Loan type

A Financial Institution reports whether the Covered Loan is or the Application was for a Covered

Loan that would have been:

1. Insured by the Federal Housing Administration;

2. Guaranteed by the Department of Veterans Affairs;

3. Guaranteed by the Rural Housing Service or the Farm Service Agency; or

4. Not insured or guaranteed by any of these Federal agencies (i.e., conventional).

12 CFR 1003.4(a)(2).

64 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.7 Loan purpose

A Financial Institution records and reports the Covered Loan’s or Application’s purpose, under

12 CFR 1003.4(a)(3), using one of the following:

1. Home Purchase Loan. A Home Purchase Loan is a Closed-End Mortgage Loan or Open-

End Line of Credit that is for the purpose,

in whole or part, of purchasing a Dwelling.

12 CFR 1003.2(j). A Home Purchase Loan

includes: (a) a Closed-End Mortgage

Loan or Open-End Line of Credit secured

by one Dwelling and used to purchase

another Dwelling; (b) a combined

construction-to-permanent loan that is

secured by a Dwelling; (c) a separate

permanent loan that replaces a construction-only loan or line of credit to the same borrower

if the permanent loan is secured by a Dwelling; and (d) a Dwelling-secured subordinate

mortgage loan that finances some or all of the home purchaser’s down payment. Comments

2(j)-1, -3, and -4.

An assumption is a Home Purchase Loan when: (a) the assumption is a Closed-End

Mortgage or Open-End Line of Credit; (b) the Financial Institution enters into a written

agreement accepting a new borrower as the obligor on an existing obligation; and (c) the

purpose is to finance the new borrower’s purchase of the Dwelling securing the existing

obligation. An assumption is not a Home Purchase Loan if the new borrower assumes the

existing borrower’s obligation after acquiring title to the Dwelling securing the existing

obligation because the purpose is not to finance the new borrower’s purchase of the

Dwelling. The assumption would be reported using a loan purpose other than Home

Purchase Loan. Comment 2(j)-5.

Home Purchase Loans do not include loans

that are excluded transactions under the

HMDA Rule, such as loans that are

temporary financing under 12 CFR

1003.3(c)(3). See Section 4.1.2 for more

information on excluded transactions.

Example: Borrower A obtains title to Owner A’s Dwelling after assuming Owner A’s

existing debt obligation. Borrower A’s transaction is a Home Purchase Loan. In contrast,

Borrower B obtains title to Owner B’s Dwelling in Year 1 and in Year 2 assumes Owner B’s

existing debt obligation. Borrower B’s transaction is not a Home Purchase Loan.

65 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. Home Improvement Loan. A Home Improvement Loan is a Closed-End Mortgage Loan

or Open-End Line of Credit that is for the purpose, in whole or part, of repairing,

rehabilitating, remodeling, or improving a Dwelling or the real property on which the

Dwelling is located. 12 CFR 1003.2(i). For example, a Home Improvement Loan includes:

(a) a Covered Loan if any of the proceeds are used for repair, rehabilitation, remodeling, or

improvement of the Dwelling or the real property on which the Dwelling securing the

Covered Loan is located, even if the remainder is used for totally unrelated purposes, such as

college tuition; (b) a Covered Loan used to install a swimming pool, construct a garage, or

improve landscaping on the real property on which the Dwelling securing the Covered Loan

is located; and (c) a Covered Loan used to improve a Multifamily Dwelling used for

residential and commercial purposes if the proceeds are used either to improve the entire

property (e.g., to replace a heating system that services the entire structure) or primarily to

improve the residential portion of the Multifamily Dwelling. Comments 2(i)-1, -2, and -4.

3. Refinancing. A Refinancing is a Closed-End Mortgage Loan or Open-End Line of Credit in

which a new Dwelling-secured debt obligation satisfies and replaces an existing Dwelling-

secured debt obligation by the same borrower. 12 CFR 1003.2(p). Generally, whether the

new debt obligation satisfies and replaces an existing obligation is determined by reference

to the parties’ contract and applicable law. In order for a Covered Loan to be a Refinancing,

both the new and existing transactions must be secured by a Dwelling. Only one borrower

need be the same on the new and existing transactions. Comments 2(p)-1, -3, and -4.

4. Cash-out Refinancing. A Financial Institution reports a Covered Loan or an Application

as a cash-out Refinancing if it is a Refinancing and the Financial Institution considered it to

be a cash-out Refinancing when processing the Application or setting the terms under its or

an investor’s guidelines. For example, if a Financial Institution considers a loan product to

be a cash-out Refinancing under an investor’s guidelines because of the amount of cash

received by the borrower at closing or account opening, it reports the transaction as a cash-

out Refinancing. If a Financial Institution does not distinguish between a cash-out

Refinancing and a Refinancing under its own guidelines, sets the terms of all Refinancings

without regard to the amount of cash received by the borrower at loan closing or account

opening, and does not offer loan products under investor guidelines, it reports all

Refinancings as Refinancings, not cash-out Refinancings. Comment 4(a)(3)-2.

5. Other. If a Covered Loan is not, or an Application is not for, a Home Purchase Loan, a

Home Improvement Loan, a Refinancing, or a cash-out Refinancing, a Financial Institution

reports the purpose as “other.” For example, if a Covered Loan is for the purpose of paying

educational expenses, the Financial Institution reports the purpose as “other.” A Financial

Institution also uses “other” if the Covered Loan is or the Application is for a Refinancing

66 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

but, under the terms of the existing credit agreement, the Financial Institution was

unconditionally obligated to refinance the obligation subject to conditions within the

borrower’s control. Comment 4(a)(3)-4.

The following chart illustrates the reportable purpose for multiple-purpose Covered Loans

originated on or after January 1, 2018. For purchased Covered Loans originated prior to

January 1, 2018, a Financial Institution reports “Not Applicable.” See also comments 4(a)(3)-3

and -6.

A Financial Institution may rely on an applicant’s oral or written statement regarding the

proposed use of the loan proceeds. For example, a Financial Institution could use a check box or

a purpose line on an Application form. If an applicant provides no statement as to the proposed

use of the proceeds, and the Covered Loan is not a Home Purchase Loan, cash-out Refinancing,

or Refinancing, a Financial Institution reports the Covered Loan as for an “other” purpose.

Comment 4(a)(3)-1.

Multiple Purposes Reportable Purpose

Home Purchase Loan and Home Improvement

Loan

Home Purchase Loan

Home Purchase Loan and Refinancing Home Purchase Loan

Home Purchase Loan and cash-out Refinancing Home Purchase Loan

Home Purchase Loan and other Home Purchase Loan

Home Improvement Loan and Refinancing Refinancing

Home Improvement Loan and cash-out

Refinancing

Cash-out Refinancing

Refinancing and other Refinancing

Cash-out Refinancing and other Cash-out Refinancing

Home Improvement Loan and other Home Improvement Loan

67 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.8 Loan amount

A Financial Institution must report the loan amount for the Covered Loan or Application.

12 CFR 1003.4(a)(7). The first chart below provides information on determining the loan

amount that is reported for Covered Loans. The second chart below provides information on

determining the reportable loan amount for transactions that involve multiple purposes,

counteroffers, and Applications that do not result in the Financial Institution originating a

Covered Loan.

If the Covered Loan is a: The reportable loan amount is the:

Closed-End Mortgage Loan other than a

purchased Closed-End Mortgage Loan,

assumption, or a Reverse Mortgage

Amount to be repaid as disclosed on the legal

obligation. 12 CFR 1003.4(a)(7)(i); comment

4(a)(7)-5.

Purchased Closed-End Mortgage Loan or

assumption of a Closed-End Mortgage Loan

Unpaid principal balance at the time of purchase

or assumption. 12 CFR 1003.4(a)(7)(i);

comment 4(a)(7)-5.

Open-End Line of Credit (including a purchased

Open-End Line of Credit and assumption of an

Open-End Line of Credit) other than a Reverse

Mortgage

Amount of credit available to borrower under the

terms of plan. 12 CFR 1003.4(a)(7)(ii);

comment 4(a)(7)-6.

Reverse Mortgage

Initial principal limit (as determined pursuant to

section 255 of the National Housing Act and

implementing regulations and mortgagee letters

issued by HUD). 12 CFR 1003.4(a)(7)(iii);

comment 4(a)(7)-9.

Refinancing

Loan amount for new debt obligation based on

the type of Covered Loan (see above).

Comment 4(a)(7)-7.

If the transaction involves: Report the:

A counteroffer that is accepted for an amount

that is different from the amount for which the

applicant applied

Loan amount granted for the Covered Loan.

Comment 4(a)(7)-1.

68 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.9 Loan term

A Financial Institution reports the loan term in the manner described below unless a partial

exemption applies. If a partial exemption applies, see Section 4.3.3.

A Financial Institution reports the loan term as the scheduled number of months after which the

legal obligation will mature or terminate or would have matured or terminated.

12 CFR 1003.4(a)(25). If a Covered Loan or Application includes a schedule with repayment

periods measured in a unit of time other than months, the Financial Institution reports the loan

term in months using an equivalent number of whole months without regard for any remainder.

Comment 4(a)(25)-2.

For a fully amortizing Covered Loan, the number of months after which the legal obligation

matures is the number of months in the amortization schedule, ending with the final payment.

Covered Loans that do not fully amortize during the maturity term, such as Covered Loans with

a balloon payment, are reported using the maturity term rather than the amortization term.

Comment 4(a)(25)-1.

A counteroffer for an amount different from the

amount f or which the applicant applied, and the

applicant did not accept or failed to respond

Amount for which applicant initially applied.

Comment 4(a)(7)-1.

An approved but not accepted Application

(including an approved but not accepted

preapproval request)

Approved loan amount. Comment 4(a)(7)-2.

Application (including a preapproval request)

that was denied, closed for incompleteness, or

withdrawn

Amount requested. Comment 4(a)(7)-3.

Loan proceeds that will be used for more than

one purpose

Entire loan amount for the Covered Loan, even if

only a portion of the proceeds is intended for the

reported purpose. Comment 4(a)(7)-4.

69 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For a purchased Covered Loan, a Financial Institution reports the number of months after

which the legal obligation matures as measured from the Covered Loan’s origination. Comment

4(a)(25)-3.

For an Open-End Line of Credit with a definite term, a Financial Institution reports the number

of months from account opening until the account termination date, including both the draw

and repayment period (if any). Comment 4(a)(25)-4.

For a Covered Loan or Application without a definite term, such as a Reverse Mortgage, a

Financial Institution reports that the data point is not applicable. Comment 4(a)(25)-5.

5.10 Action taken and date

A Financial Institution reports its action taken and the date of its action. 12 CFR 1003.4(a)(8).

The action taken is reported as one of the following: (1) loan originated; (2) application

approved but not accepted; (3) application denied; (4) application withdrawn; (5) file closed for

incompleteness; (6) loan purchased; (7) preapproval request denied; or (8) preapproval request

approved but not accepted. 12 CFR 1003.4(a)(8)(i); comments 4(a)(8)(i)-1 through -14.

The Action Taken chart in Attachment B

provides additional information on how to determine

the reportable action taken and date of action taken. See also 12 CFR 1003.4(a)(8)(ii) and its

commentary for information on reporting the date of the action taken.

5.11 Reasons for denial

A Financial Institution reports the reasons for denial in the manner described below unless a

partial exemption applies. If a partial exemption applies, see Section 4.3.3.

Certain Financial Institutions supervised by the OCC and the FDIC are required b y those agencies to report reasons

for denial on their HMDA loan/application registers, even if a partial exemption applies. 12 CFR 27.3(a)(1)(i),

128.6, 390.147.

70 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For an Application that it denied, a Financial Institution must report the principal reasons (up

to four) that it denied the Application. 12 CFR 1003.4(a)(16); comment 4(a)(16)-1. For all other

transactions, a Financial Institution reports that the data point is not applicable. Comment

4(a)(16)-4.

If a Financial Institution provided the reason or reasons it denied the Application using the

model form contained in appendix C to Regulation B (Form C–1, Sample Notice of Action Taken

and Statement of Reasons) or a similar form, the Financial Institution reports the reason or

reasons specified on that form, including reporting the “Other” reason or reasons that were

specified on the form, if applicable. If a Financial Institution provided a disclosure of the

applicant’s right to a statement of specific reasons using the model form contained in appendix

C to Regulation B (Form C–5, Sample Disclosure of Right to Request Specific Reasons for Credit

Denial) or a similar form, or provided the denial reasons orally under Regulation B, the

Financial Institution reports the principal reasons it denied the Application.

Comment 4(a)(16)-3.

The Financial Institution reports only the principal reason or reasons it denied the Application,

even if there are fewer than four reasons. For example, if a Financial Institution denied the

Application because of the applicant’s credit history and debt-to-income ratio, the Financial

Institution only reports these two principal reasons. The reason or reasons reported must be

specific and accurately describe the principal reason or reasons the Financial Institution denied

the Application. Comment 4(a)(16)-1.

If a Financial Institution denied a preapproval request under a Preapproval Program, the

Financial Institution must report the principal reason or reasons (up to four) that it denied the

preapproval request. Comment 4(a)(16)-2.

71 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.12 Property address and property location

Unless a partial exemption applies, a Financial Institution reports the property address of the

property securing the Covered Loan or, for

an Application, proposed to secure the

Covered Loan. 12 CFR 1003.4(a)(9)(i). For

Applications that did not result in an

origination, the property address

corresponds to the location of the property

proposed to secure the loan as identified by

the applicant. For Covered Loans, the

property address corresponds to the

property identified in the legal obligation. Comment 4(a)(9)(i)-1. If a partial exemption applies

to a Covered Loan or Application, see Section 4.3.3 for information on reporting the property

address.

Additionally, regardless of whether a partial

exemption applies, a Financial Institution

reports the property location (i.e., the state,

county, and census tract) for the property

securing the Covered Loan or, for an

Application, proposed to secure the Covered

Loan if: (1) the property is located in an MSA

or metropolitan division (MD)

in which the

Financial Institution has a home or Branch Office; or (2) if the Financial Institution is a bank or

savings association required to report data on small business, small farm, and community

development lending under the CRA.

Metropolitan divisions (MDs) are metropolitan divisions of MSAs as defined by the OMB. 12 CFR 1003.2(m)(2).

For more information on MDs and MSAs, see https://www.ffiec.gov/census/default.aspx

and

https://www.ffiec.gov/geocode/help1.aspx.

Property address is one of the 26 data points

that a Financial Institution is not required to

report if a partial exemption applies to a

transaction. However, the property location

data points (i. e. , state, county, and census

tract) are among the 22 data points that are

not affected by the HMDA Rule.

For transactions for which state, county, or

census tract is not required, a Financial

Institution may report that the data point is

not applicable, or it may voluntarily report

the state, county, or census tract info rmation.

Comment 4(a)(9)(ii)-1.

72 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If a Financial Institution is required to

report property location, it must include the

census tract only if the property is located

in a county with a population of more than

30,000 according to the most recent

decennial census. 12 CFR 1003.4(a)(9)(ii).

See also 12 CFR 1003.4(e).

If a Covered Loan is related to more than one property, but only one property secures or, for an

Application, would have secured the Covered Loan, a Financial Institution reports the property

address and property location, as applicable, of the property that secures or would have secured

the Covered Loan. A Financial Institution does not report the property address or property

location for any properties that do not secure or would not have secured the Covered Loan.

Comment 4(a)(9)-1.

If more than one property secures the Covered Loan or, in the case of an Application, would

have secured the Covered Loan, a Financial Institution reports the Covered Loan or Application

in a single entry on its LAR and provides the property address and property location, as

applicable, for only one property. The Financial Institution can choose the property for which it

reports this information, but it must choose a property that secures the Covered Loan (or, in the

case of an Application, would have secured the Covered Loan) and that includes a Dwelling. If a

single Multifamily Dwelling has more than one postal address, a Financial Institution reports

one of the postal addresses. Comments 4(a)(9)-2 and -3.

If other data points require the Financial Institution to report specific information about

property securing or involved with a Covered Loan or Application, the Financial Institution

reports the information that relates to the property for which it has provided the address and

location for these data points. Comment 4(a)(9)-2. For purposes of this guide, the property for

which the Financial Institution has provided the address and location for these data points is

called the Identified Property.

If the site for a Manufactured Home has not been identified, a Financial Institution may report

that the data points for the property address and property location are not applicable. Comment

4(a)(9)-5. If the property address of the property securing the Covered Loan is unknown, a

Financial Institution may report that the data point for the property address is not applicable.

For example, the Financial Institution may report that the data point is not applicable if the

Incorrect entries reporting the census tract

are not violations of HMDA or Regulation C

if the Financial Institution obtained the

census tract number from the geocoding tool

made available through the Bureau’s website,

provided the Financial Institution entered an

accurate property address into the tool and

the tool returned a census tract number. For

more information, see Section 7.

73 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

property did not have an address at closing or if the applicant did not provide the property

address before the Application was denied, withdrawn, or closed for incompleteness. Comment

4(a)(9)(i)-3.

Similarly, when reporting an Application, a Financial Institution may report that the data points

for property location (i.e., state, county, and census tracts) are not applicable if the information

was not known before the Application was denied, withdrawn, or closed for incompleteness.

Comments 4(a)(9)(ii)(A)-1, (B)-2, and (C)-2.

5.13 Construction method

A Financial Institution reports the construction method for the Identified Property, using one of

the following:

1. Site-built; or

2. Manufactured Home. 12 CFR 1003.4(a)(5).

A residential structure that satisfies the definition of “manufactured home” under HUD’s

regulations, 24 CFR 3280.2, is reported as a Manufactured Home. 12 CFR 1003.2(l). A

Manufactured Home will generally bear a HUD Certification Label and data plate noting

compliance with the Federal standards. Comment 2(l)-2.

Modular homes and factory-built homes that do not meet the definition of “manufactured

home” in HUD’s regulations are not Manufactured Homes under the HMDA Rule and are

reported as site-built, regardless of whether they are on-frame or off-frame modular homes.

Modular homes comply with local or other recognized buildings codes rather than standards

established by the National Manufactured Housing Construction and Safety Standards Act, 42

U.S.C. 5401 et seq. Modular homes are not required to have HUD Certification Labels under 24

CFR 3280.11 or data plates under 24 CFR 3280.5, but may have a certification from a State

licensing agency that documents compliance with State or other applicable building codes.

Dwellings built using prefabricated components assembled at the Dwelling’s permanent site

should also be reported as site-built. Comment 4(a)(5)-1.

For a Multifamily Dwelling, the Financial Institution should report the construction method as

site-built unless the Multifamily Dwelling is a Manufactured Home community, in which case

74 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the Financial Institution should report the construction method as Manufactured Home.

Comment 4(a)(5)-2.

5.14 Occupancy type

A Financial Institution reports the occupancy type for the Identified Property, using one of the

following:

1. Principal residence. An applicant or borrower can have only one principal residence at a

time. However, if an applicant or borrower buys or builds a new Dwelling that will become

the applicant’s or borrower’s principal residence within a year or upon the completion of

construction, the new Dwelling is considered the principal residence for this data point.

Comment 4(a)(6)-2. For purchased Covered Loans, a Financial Institution may report the

occupancy type as “principal residence” unless the loan documents or Application indicate

that the property will not be occupied as a principal residence. Comment 4(a)(6)-5.

2. Second residence. A property is a second residence if the property is or will be occupied

by the applicant or borrower for a portion of the year and is not the applicant’s or borrower’s

principal residence. For example, if a person purchases a property, occupies the property for

a portion of the year, and rents the property for the remainder of the year, the property is a

second residence. Similarly, if a person occupies a property near his or her place of

employment on weekdays, but the person returns to his or her principal residence on

weekends, the property near the person’s place of employment is a second residence.

Comment 4(a)(6)-3.

3. Investment property. A property is an investment property if the applicant or borrower

does not occupy the property. For example, if a person purchases a property, does not

occupy the property, and generates income by renting the property, the property is an

investment property. Similarly, if a person purchases a property, does not occupy the

property, and does not generate income by renting the property, but intends to generate

income by selling the property, the property is an investment property. Comment 4(a)(6)-4.

If a corporation purchases a property that is a Dwelling and uses it for the long-term

residence of its employees, the property is an investment property, even if the corporation

considers the property as owned for business purposes rather than investment purposes,

does not generate income by renting the property, and does not intend to generate income

by selling the property. If the property is for transitory use by employees, the property

would not be considered a Dwelling. Comment 4(a)(6)-4.

75 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.15 Lien status

A Financial Institution reports the lien status of the lien on the Identified Property as either a

first lien or a subordinate lien. 12 CFR 1003.4(a)(14).

The HMDA Rule requires a Financial Institution to report the lien status for Covered Loans it

purchased. For purchased Covered Loans, lien status is determined by reference to the best

information readily available to the Financial Institution at the time of purchase.

For Applications and originations of Covered Loans, lien status is determined by reference to the

best information readily available to the Financial Institution at the time final action is taken

and to the Financial Institution’s own procedures. When reporting lien status, Financial

Institutions may rely on title searches they routinely obtain, but the HMDA Rule does not

require Financial Institutions to obtain title searches solely to comply with Regulation C.

Financial Institutions may rely on other information that is readily available to them at the time

final action is taken and that they reasonably believe is accurate, such as the applicant’s

statement on the Application form or the applicant’s credit report. Comment 4(a)(14)-1.

Examples: An applicant applies for a Covered Loan from Ficus Bank and indicates on the

Application form that there is a mortgage on the Dwelling that will secure the applicant’s

Covered Loan. Ficus Bank obtains the applicant’s credit report, and it shows that the

applicant has a mortgage loan. The existing mortgage will not be paid off as part of the

transaction. Ficus Bank may assume that the transaction involves a subordinate lien for

purposes of HMDA reporting.

An applicant applies for a loan from Ficus Bank to refinance the applicant’s existing home

mortgage loan. The existing loan is and the new loan will be secured by the applicant’s

principal residence. The applicant also has an Open-End Line of Credit for $20,000

secured by the principal residence. Ficus Bank’s practice in such a case is to ensure that it

will have first-lien position through a subordination agreement with the holder of the lien

securing the Open-End Line of Credit. Ficus Bank may assume that the transaction

involves a first lien for purposes of HMDA reporting.

76 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.16 Manufactured home information

A Financial Institution reports manufactured home information in the manner described below

unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

If a Dwelling on the Identified Property is a Manufactured Home and not a Multifamily Dwelling

(i.e., it has four or fewer individual dwelling units), the Financial Institution must report both:

1. Secured Property Type. Whether the Covered Loan is or the Application would have

been secured by: (a) both a Manufactured Home and land; or (b) a Manufactured Home and

not land. 12 CFR 1003.4(a)(29). A Financial Institution reports that a Covered Loan is or

would have been secured only by a Manufactured Home and not land if the Covered Loan is

not secured by the land, even if the Manufactured Home is considered real property under

applicable State law. Comment 4(a)(29)-1.

2. Land Property Interest. Information about the applicant’s or borrower’s property

interest in the land on which the Manufactured Home is or would have been located,

reported as one of the following:

a. Direct ownership. An applicant or borrower has a direct ownership interest in the land

on which the Dwelling is or is to be located when it has more than a possessory real

property ownership interest in the land, such as fee simple ownership. Comment

4(a)(30)-5.

b. Indirect ownership. Indirect land ownership can occur when the applicant or borrower

is or will be a member of a resident-owned community structured as a housing

cooperative in which the occupants own an entity that holds the land underlying the

Manufactured Home community. In such communities, the applicant or borrower may

still have a lease and pay rent for the lot on which his or her Manufactured Home is or

will be located, but the property interest type for such an arrangement should be

reported as indirect ownership if the applicant is or will be a member of the cooperative

that owns the Manufactured Home community’s underlying land. If an applicant resides

or will reside in such a community but is not a member, the property interest type should

be reported as a paid leasehold. Comment 4(a)(30)-1.

c. Paid Leasehold. For example, a paid leasehold occurs when a borrower locates the

Manufactured Home on a lot in which the borrower does not have an ownership interest,

77 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the borrower has a written lease for the lot, and the lease specifies rent payments.

Comment 4(a)(30)-2.

d. Unpaid Leasehold. For example, an unpaid leasehold occurs when the borrower locates

the Manufactured Home on land owned by a family member, does not have a written

lease, and does not have an agreement regarding rent payments. Comment 4(a)(30)-2.

If the Dwelling securing the Covered Loan (or that would have secured the resulting Covered

Loan in the case of an Application) is not a Manufactured Home, the Financial Institution

reports that these data points are not applicable. Comments 4(a)(29)-4 and 4(a)(30)-6.

A Manufactured Home community that is a Multifamily Dwelling is not considered a

Manufactured Home for purposes of reporting these data points. Comment 4(a)(29)-2 and

4(a)(30)-4.

5.17 Property value

A Financial Institution reports the property value in the manner described below unless a partial

exemption applies. If a partial exemption applies, see Section 4.3.3.

For a Covered Loan, a Financial Institution reports the value of the property securing the

Covered Loan. For an Application that did not result in a Covered Loan (other than an

Application that was withdrawn before a credit decision was made or that was closed for

incompleteness), a Financial Institution reports the value of the property proposed to secure the

Covered Loan. 12 CFR 1003.4(a)(28). A Financial Institution reports that the data point is not

applicable for an Application that was withdrawn before a credit decision was made or was

closed for incompleteness, even if the Financial Institution obtained a property value. Comment

4(a)(28)-3.

A Financial Institution reports the property value it relied on in making its credit decision.

12 CFR 1003.4(a)(28). If the Financial Institution relied on an appraisal or other valuation of a

property when calculating the loan-to-value ratio, it reports the value stated in the appraisal or

other valuation on which it relied. If the Financial Institution relied on the purchase price of a

property when calculating the loan-to-value ratio, it reports the purchase price as the property

value. Comment 4(a)(28)-1.

78 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The HMDA Rule does not require a Financial Institution to obtain a property valuation or to rely

on a property value in making a credit decision. A Financial Institution reports that this data

point is not applicable if it does not rely on property value when making the credit decision.

Comment 4(a)(28)-4.

5.18 Total units

For a Covered Loan, a Financial Institution reports the number of individual Dwelling units

related to the property securing the Covered Loan. For an Application, it reports the number of

individual Dwelling units related to the property proposed to secure the Covered Loan.

12 CFR 1003.4(a)(31).

For an Application or Covered Loan secured by a Manufactured Home community, the Financial

Institution should include the total number of Manufactured Home sites that secure the loan

and are available for occupancy, regardless of whether the sites are occupied or have

Manufactured Homes attached. 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. Comment 4(a)(31)-2.

For a Covered Loan secured by a condominium or cooperative complex, the Financial

Institution reports the total number of individual Dwelling units securing the Covered Loan or

proposed to secure the Covered Loan in the case of an Application. Comment 4(a)(31)-3.A

Financial Institution may include 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 investor

guidelines, or if it tracks the number of such units for its own internal purposes. Comment

4(a)(31)-2.

Example: Ficus Bank obtains an appraisal that values a parcel of property at $100,000,

an automated valuation model report that values the property at $110,000, and a broker

price opinion that values the property at $105,000. When approving the Application,

Ficus Bank relies on the appraisal. It reports the property value as $100,000.

79 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution may rely on the best information readily available to it at the time action

is taken and on the Financial Institution’s own procedures. Information readily available could

include, for example, information provided by an applicant that the Financial Institution

reasonably believes, information contained in a property valuation or inspection, or information

obtained from public records. Comment 4(a)(31)-4.

5.19 Multifamily affordable units

A Financial Institution reports information about multifamily affordable units in the manner

described below unless a partial exemption applies. If a partial exemption applies, see Section

4.3.3.

If the property securing a Covered Loan or proposed to secure an Application includes a

Multifamily Dwelling, the Financial Institution must provide the number of individual Dwelling

units that are income-restricted pursuant to Federal, State, or local affordable housing

programs.

12 CFR 1003.4(a)(32). For a Covered Loan that is not secured by a Multifamily

Dwelling and for an Application that would not have been secured by a Multifamily Dwelling,

the Financial Institution reports that this data point is not applicable. Comment 4(a)(32)-6.

Affordable housing income-restricted units are individual Dwelling units that have restrictions

based on the occupants’ income level pursuant to restrictive covenants encumbering the

property. The restrictive covenants may be evidenced by a use agreement, regulatory

agreement, land use restrictions, or a similar agreement. Rent control or rent stabilization laws,

Examples of Federal programs and funding sources that may result in reportable units include but are not limited

to: (1) affordable housing programs pursuant to Section 8 of the United States Housing Act of 1937; (2) public

housing; (3) the HOME Investment Partnerships program; (4) the Community Development Block Grant program;

(5) multifamily tax subsidy project funding through tax-exempt bonds or tax credits; (6) Federal Home Loan Bank

affordable housing program funding; (7) Rural Housing Service multifamily housing loans and grants; and (8)

project-based vouchers under 24 CFR part 983. Comment 4(a)(32)-2.

Examples of State and local sources that may result in reportable units include but are not limited to: (1) State or

local administration of Federal funds or programs; (2) State or local funding programs for affordable housing or

rental assistance, including programs operated by independent public authorities; (3) inclusionary zoning laws; and

(4) tax abatement or tax increment financing contingent on affordable housing requirements. Comment 4(a)(32)-3.

80 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

the acceptance of Housing Choice Vouchers, and other similar forms of portable housing

assistance that are tied to an occupant and not an individual dwelling unit are not affordable

housing income-restricted Dwelling units for purposes of reporting. Comment 4(a)(32)-1.

A Financial Institution may rely on the best information readily available to it at the time final

action is taken and on the Financial Institution’s own procedures when reporting. Information

readily available could include, for example, information provided by an applicant that the

Financial Institution reasonably believes, information contained in a property valuation or

inspection, or information obtained from public records. Comment 4(a)(32)-5.

5.20 Debt-to-income ratio

A Financial Institution reports debt-to-income (DTI) ratio in the manner described below unless

a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

Except for purchased Covered Loans, if the Financial Institution relied on the applicant’s or

borrower’s DTI ratio when making its credit decision, the Financial Institution reports the DTI

ratio on which it relied in making the credit decision. 12 CFR 1003.4(a)(23). The DTI ratio is

the ratio of the applicant’s or borrower’s total monthly debt to total monthly income.

A Financial Institution relied on the applicant’s or borrower’s DTI ratio in making the credit

decision if the DTI ratio was a factor in the credit decision, even if it was not a dispositive factor.

For example, if the DTI ratio was one of multiple factors in a Financial Institution’s credit

decision, the Financial Institution relied on the DTI ratio, even if the Financial Institution

denied the Application because one or more underwriting requirements other than the DTI ratio

were not satisfied. Comment 4(a)(23)-2.

Example: Ficus Bank calculates the applicant’s DTI ratio twice−once according to its

own requirements and once according to an investor’s requirements. Ficus Bank relies

on the DTI ratio calculated according to the investor’s requirements when it makes the

credit decision. Ficus Bank reports the DTI ratio calculated in accordance with the

investor’s requirements. Comment 4(a)(23)-1.

81 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

The HMDA Rule does not require a Financial Institution to calculate a DTI ratio and does not

require a Financial Institution to rely on an applicant’s or borrower’s DTI ratio in making a

credit decision. Comment 4(a)(23)-4.

A Financial Institution reports that this data point is not applicable:

1. If it made a credit decision without relying on a DTI ratio;

2. If the Application file was closed for incompleteness (even if a DTI ratio was calculated);

3. For an Application that was withdrawn before a credit decision was made (even if a DTI

ratio was calculated);

4. If the applicant and co-applicant, if applicable, are not natural persons;

5. For a Covered Loan that is secured, or an Application that is proposed to be secured, by a

Multifamily Dwelling; or

6. For a purchased Covered Loan. Comments 4(a)(23)-3 through -7.

5.21 Combined loan-to-value

A Financial Institution reports combined loan-to-value (CLTV) in the manner described below

unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

Except for a purchased Covered Loan, if the Financial Institution relied on a CLTV ratio when

making its credit decision, the Financial Institution reports the CLTV ratio on which it relied.

The CLTV ratio is the ratio of the total amount of debt secured by the property securing the

Covered Loan (or, for an Application, proposed to secure a Covered Loan) to the value of that

property. 12 CFR 1003.4(a)(24). A Financial Institution reports the CLTV ratio relied on in

making the credit decision, regardless of which property or properties it used in the CLTV ratio

calculation. The property used in the CLTV ratio does not need to be the Identified Property and

may include more than one property and non-real property. Comment 4(a)(24)-6.

Financial Institution relied on the CLTV ratio when making the credit decision if the CLTV ratio

was a factor in the credit decision, even if it was not a dispositive factor. For example, if the

CLTV ratio was one of multiple factors in a Financial Institution’s credit decision, the Financial

Institution relied on the CLTV ratio, even if the Financial Institution denied the Application

82 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

because one or more underwriting requirements other than the CLTV ratio were not satisfied.

Comments 4(a)(24)-1 and -2.

The HMDA Rule does not require a Financial Institution to calculate the CLTV ratio and does

not require a Financial Institution to rely on a CLTV ratio in making a credit decision. Comment

4(a)(24)-4.

A Financial Institution reports that this data point is not applicable:

1. If it did not rely on a CLTV when making the credit decision;

2. If the Application file was closed for incompleteness (even if a CLTV ratio was

calculated);

3. For an Application that was withdrawn before a credit decision was made (even if a CLTV

ratio was calculated); or

4. For a purchased Covered Loan. Comments 4(a)(23)-3 through -5.

Examples: Ficus Bank reviews an Application that will be secured by two parcels of real

property. It calculates the CLTV ratio using its own requirements. It also calculates the

CLTV ratio using an investor’s requirements. When making its credit decision, Ficus

Bank relies on the CLTV ratio calculated according to the investor’s requirements. Ficus

Bank reports the CLTV ratio calculated according to the investor’s requirements.

Ficus Bank originates a Covered Loan for the purchase of a Multifamily Dwelling. The

Covered Loan is secured by the Multifamily Dwelling and certain securities. Ficus Bank

uses both the value of the Multifamily Dwelling and the value of the securities when

calculating the CLTV ratio that it relies on when making the credit decision. Ficus Bank

reports the CLTV ratio it relies on when making the credit decision.

83 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.22 Credit score information

A Financial Institution reports credit score information in the manner described below unless a

partial exemption applies. If a partial exemption applies, see Section 4.3.3.

Except for purchased Covered Loans, a Financial Institution reports the credit score or scores it

relied on in making the credit decision and the name and version of the scoring model used to

generate each reported credit score. 12 CFR 1003.4(a)(15)(i).

The term “credit score” has the same meaning as set forth in the Fair Credit Reporting Act, 15

USC 1681g(f)(2)(A). 12 CFR 1003.4(a)(15)(ii). A “credit score” is a numerical value or a

categorization derived from a statistical tool or modeling system used by a person who makes or

arranges a loan to predict the likelihood of certain credit behaviors, including default. A “credit

score” does not include: (1) any mortgage score or rating of an automated underwriting system

that considers one or more factors in addition to credit information, including loan-to-value

ratio, the amount of down payment, or the consumer’s financial assets; or (2) any other

elements of the underwriting process or underwriting decision. 15 USC 1681g(f)(2)(A).

A Financial Institution relied on a credit score in making the credit decision if the credit score

was a factor in the credit decision, even if it was not a dispositive factor. For example, if a credit

score was one of multiple factors in a Financial Institution’s credit decision, the Financial

Institution relied on the credit score even if the Financial Institution denied the Application

because one or more underwriting requirements other than the credit score were not satisfied.

Comment 4(a)(15)-1.

When a Financial Institution obtained or created two or more credit scores for a single applicant

or borrower but relied on only one score in making the credit decision (e.g., by relying on the

lowest, highest, most recent, or average of all of the scores), the Financial Institution reports the

credit score it actually relied on and the information about the scoring model it used. When a

Financial Institution used more than one credit scoring model and combined the scores into a

composite score and then relied on the composite score, the Financial Institution reports the

composite score and reports that more than one scoring model was used. When a Financial

Institution obtained two or more credit scores for the applicant or borrower and relied on

multiple credit scores in making the credit decision (e.g., by relying on a scoring grid that

considers each of the scores obtained or created for the applicant or borrower without

combining the scores into a composite score), the Financial Institution reports one of the credit

84 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

scores that it relied on in making the credit decision. In choosing which credit score to report, a

Financial Institution need not use the same approach for its entire HMDA data submission, but

it should be generally consistent (e.g., by routinely using one approach within a particular

division of the Financial Institution or for a category of Covered Loans). The Financial

Institution reports the name and version of the credit-scoring model for the score reported.

Comment 4(a)(15)-2.

If a transaction involved two or more applicants or borrowers for whom the Financial Institution

obtained or created a single credit score and if the Financial Institution relied on that single

credit score when making the credit decision, the Financial Institution reports that credit score

for the applicant and reports that the data point is not applicable for the co-applicant.

Alternatively, at its discretion, the Financial Institution may report that credit score for the first

co-applicant and report that the data point is not applicable for the applicant. If a transaction

involved more than one applicant and a Financial Institution relied on separate credit scores for

each applicant, it reports the credit score it relied on for the applicant and the credit score it

relied on for the first co-applicant. Comment 4(a)(15)-3.

A Financial Institution reports that the credit score data point is not applicable:

1. For purchased Covered Loans;

Examples: Two individuals apply for a Covered Loan. Ficus Bank obtains two credit

scores for the applicant and two credit scores for the co-applicant. Ficus Bank relies on

the highest of the four credit scores it obtained. Ficus Bank reports the highest credit

score and information about the credit scoring model used. Ficus Bank may report the

score and information for the applicant and report “not applicable” for the co-applicant

or, at its discretion, Ficus Bank can report the score and information for the co-applicant

and report “not applicable” for the applicant.

Two individuals apply for a Covered Loan. Ficus Bank obtains three credit scores for the

applicant and three credit scores for the co-applicant. Ficus Bank relies on the middle

credit score for the applicant and the middle score for the co-applicant. Ficus Bank

reports the middle score and related scoring model information for the applicant and the

middle score and related scoring model information for the co-applicant.

85 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

2. If the Financial Institution did not rely on a credit score;

3. If the Application file was closed for incompleteness (even if a credit score was obtained

or created);

4. If an Application was withdrawn before a credit decision was made (even if a credit score

was obtained or created); or

5. If the applicant and co-applicant, if applicable, are not natural persons. Comments

4(a)(15)-4 through -7.

5.23 Automated underwriting system

information

A Financial Institution reports automated underwriting system (AUS) information in the

manner described below unless a partial exemption applies. If a partial exemption applies, see

Section 4.3.3.

Except for purchased Covered Loans, a Financial Institution reports the name of the Automated

Underwriting System (AUS), as defined below, that it used to evaluate the Application and the

AUS result generated by that AUS. 12 CFR 1003.4(a)(35)(i). A Financial Institution must report

this information only if the Financial Institution used an AUS to evaluate the Application.

Comment 4(a)(35)-4.

For purposes of the HMDA Rule, an Automated Underwriting System or AUS is an electronic

tool:

1. Developed by a securitizer, Federal government insurer, or Federal government

guarantor of Closed-End Mortgage Loans or Open-End Lines of Credit. For this purpose,

a person is a securitizer, Federal government insurer, or Federal government guarantor

of Closed-End Mortgage Loan or Open-End Lines of Credit if that person has ever

securitized, provided Federal government insurance for, or provided a Federal

government guarantee for a Closed-End Mortgage Loan or Open-End Line of Credit at

any point in time. The person does not need to be actively securitizing, insuring, or

guaranteeing Closed-End Mortgage Loans or Open-End Lines of Credit at the time that

the Financial Institution uses the AUS to evaluate an Application.

12 CFR 1003.4(a)(35)(ii); comment 4(a)(35)-2. If a Financial Institution knows or

86 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

reasonably believes that the system it is using to evaluate an Application is an electronic

tool developed by a securitizer, Federal government insurer, or Federal government

guarantor of Closed-End Mortgages or Open-End Lines of Credit, then this prong of the

definition of AUS is satisfied, and

the Financial Institution must report

the name of the system and the

result generated by that system if

the second prong of the definition,

below, is satisfied. If a Financial

Institution does not know or

reasonably does not believe that the

system was developed by a

securitizer, Federal government

insurer, or Federal government

guarantor of Closed-End Mortgages

or Open-End Lines of Credit, then

the Financial Institution reports that

the data point is not applicable,

provided that the Financial

Institution maintains procedures

reasonably adapted to determine

whether the electronic tool it is

using meets the definition of an

AUS. Comment 4(a)(35)-7.

2. That provides a result regarding

both (a) the applicant’s credit risk;

and (b) whether the Covered Loan is

eligible to be originated, purchased, insured, or guaranteed by the securitizer, Federal

government insurer, or Federal government guarantor that developed the electronic tool.

In order for a system to be an AUS, the system must provide a result regarding both the

credit risk of the applicant and the eligibility of the loan to be originated, purchased,

insured, or guaranteed by the securitizer, Federal government insurer, or Federal

government guarantor that developed the system being used to evaluate the Application.

For example, if a system is an electronic tool that provides a determination of the loan’s

eligibility to be purchased, but the system does not also provide an assessment of the

applicant’s creditworthiness—such as an evaluation of the applicant’s income, debt, and

In order to know or reasonably believe that a

system is not developed by a securitizer,

Federal government insurer, or Federal

government guarantor of Closed-End

Mortgage Loans or Open-End Lines of

Credit, a Financial Institution must maintain

procedures reasonably adapted to make such

a determination. Reasonably adapted

procedures include attempting to determine

with reasonable frequency, such as annually,

whether the developer of the electronic tool is

a securitizer, Federal government insurer, or

Federal government guarantor of Closed-End

Mortgage Loans or Open-End Lines of

Credit. For example, in the course of

renewing an annual sales agreement the

developer could represent to the Financial

Institution that the developer is not such a

securitizer, Federal government insurer, or

Federal government guarantor of Closed-End

Mortgage Loans or Open-End Lines of

Credit. Comment 4(a)(35)-7.

87 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

credit history—the system is not an AUS. In that case, the Financial Institution reports

that the data point is not applicable. 12 CFR 1003.4(a)(35)(ii); comment 4(a)(35)-2.

If a Financial Institution has developed its own proprietary system that it uses to evaluate an

Application and the Financial Institution is also a securitizer, the system may be an AUS if it also

meets the other elements of the AUS definition. On the other hand, if a Financial Institution has

developed its own proprietary system that it uses to evaluate an Application but the Financial

Institution is not a securitizer, the system is not an AUS. Comment 4(a)(35)-2.

A Financial Institution that used an AUS to evaluate an Application must report the name of the

AUS it used to evaluate the Application and the result generated by that system regardless of

whether the Financial Institution intends to sell or hold the Covered Loan in its portfolio. For

example, if a Financial Institution used an AUS developed by a securitizer to evaluate an

Application but ultimately did not sell the Covered Loan and instead holds the Covered Loan in

its portfolio, the Financial Institution reports the name of the AUS that the Financial Institution

used to evaluate the Application and the result generated by that system. Comments 4(a)(35)-1.i

and ii.

If a Financial Institution used more than one AUS to evaluate an Application or if a Financial

Institution used one AUS to evaluate an Application but it generated multiple results, the

Financial Institution must determine which AUS or AUSs and which result or results to

report. To do so, the Financial Institution can use the following steps in the exact order they are

presented below.

1. The Financial Institution must determine whether an AUS that it used to evaluate the

Application matches the loan type it reported for the Application or Covered Loan. For more

information on reporting loan type, see Section 5.6.

2. If the Financial Institution used an AUS that matches loan type (such as Total Scorecard for

an FHA loan), it must determine whether it obtained only one result from that AUS. If the

Financial Institution obtained only one result from the AUS that matches loan type, the

Financial Institution reports the AUS that matches loan type and the result that it obtained

from that AUS.

3. If the Financial Institution did not use an AUS that matches loan type or if it obtained more

than one result from the AUS that matches loan type, the Financial Institution must

determine whether an AUS that it used to evaluate the Application matches the purchaser,

insurer, or guarantor (if any) for the Covered Loan.

88 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

4. If the Financial Institution used an AUS that matches the purchaser, insurer, or guarantor

(such as Desktop Underwriter for a Covered Loan that Fannie Mae purchased), it must

determine whether it obtained only one result from that AUS. If the Financial Institution

obtained only one result from the AUS that matches the purchaser, insurer, or guarantor,

the Financial Institution reports the AUS that matches and the result that it obtained from

that AUS.

5. If the Financial Institution did not use an AUS that matches the purchaser, insurer, or

guarantor or it obtained multiple results from an AUS that matches the purchaser, insurer,

or guarantor or loan type, the Financial Institution reports the result it obtained closest in

time to the credit decision and the AUS that generated that result, unless the Financial

Institution obtained multiple results closest in time to the credit decision. For example, a

Financial Institution obtains multiple results closest in time to the credit decision if it

obtains two results at noon on the day immediately before it makes the credit decision and

does not obtain any results at a later time.

6. If the Financial Institution simultaneously obtains multiple results closest in time to the

credit decision, the Financial Institution reports each of the multiple AUS results that it

obtained and the AUSs that generated each of those results up to a total of five results and

five AUSs. The Financial Institution will never report more than five results or five AUSs. If

the Financial Institution used more than five AUSs or it obtained more than five results, the

Financial Institution chooses five AUSs and five results to report. Comment 4(a)(35)-3.

The HMDA Rule does not require a Financial Institution to use an AUS when evaluating an

Application. Comment 4(a)(35)-4. A Financial Institution reports that the AUS data point is

not applicable:

1. If it does not use an AUS to evaluate the Application;

2. When the applicant and co-applicant, if applicable, are not natural persons; or

3. For purchased Covered Loans. Comments 4(a)(35)-4 through -6.

5.24 Interest rate

A Financial Institution reports the interest rate in the manner described below unless a partial

exemption applies. If a partial exemption applies, see Section 4.3.3.

89 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution reports the interest rate applicable to a Covered Loan or to an

Application that is approved but not accepted. 12 CFR 1003.4(a)(21). For Applications that are

denied, withdrawn or closed for incompleteness, a Financial Institution reports that this data

point is not applicable. Comment 4(a)(21)-2.

The following table describes which rate a Financial Institution reports depending on the type of

transaction. For purposes of this table, the date a revised Loan Estimate or corrected Closing

Disclosure is provided to the applicant or borrower is the date disclosed as the “Date Issued” on

that revised or corrected disclosure.

For an:

Report:

Application approved but not accepted for fixed-

rate Covered Loan subject to Regulation Z’s

Loan Estimate and Closing Disclosure

requirements

Rate stated in Loan Estimate (if no Closing

Disclosure provided) or in Closing Disclosure (if

provided), assuming it accurately reflects the

rate when Financial Institution approved the

Application. If a revised Loan Estimate (but no

Closing Disclosure) was provided to the

applicant prior to the end of the reporting

period in which final action was taken or if a

corrected Closing Disclosure was provided to

the applicant prior to the end of the reporting

period in which final action was taken, the

Financial Institution reports the rate stated in the

revised or corrected disclosure, as applicable.

Otherwise, rate at the time Financial Institution

approved the Application. Comments 4(a)(21)-1

and -2.

Application approved but not accepted for a

f ixed-rate Covered Loan not subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

Rate applicable when Financial Institution

approved the Application. Comment 4(a)(21)-2.

Application approved but not accepted for a

variable-rate Covered Loan subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

Rate stated in Loan Estimate (if no Closing

Disclosure provided) or in Closing Disclosure (if

provided), assuming it accurately reflects the

rate when Financial Institution approved the

Application. If a revised Loan Estimate (but no

Closing Disclosure) was provided to the

applicant prior to the end of the reporting period

in which f inal action was taken or if a corrected

Closing Disclosure was provided to the applicant

prior to the end of the reporting period in which

f inal action was taken, the Financial Institution

90 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For an:

Report:

reports the rate stated in the revised or

corrected disclosure, as applicable. Comments

4(a)(21)-1 and -2.

Otherwise, if rate was known when Financial

Institution approved the Application, the rate

applicable when Financial Institution approved

the Application. Comment 4(a)(21)-2.

Otherwise, if rate was unknown when Financial

Institution approved the Application, the fully-

indexed rate based on the index applicable

when the Financial Institution approved the

Application. Comment 4(a)(21)-3.

Application approved but not accepted for a

variable-rate Covered Loan not subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

If rate was known when Financial Institution

approved the Application, the rate applicable

when Financial Institution approved the

Application. Comment 4(a)(21)-2.

If rate was unknown when Financial Institution

approved the Application, the fully-indexed rate

based on the index applicable when the

Financial Institution approved the Application.

Comment 4(a)(21)-3.

Application denied, withdrawn, or closed for

incompleteness

Not applicable. Comment 4(a)(21)-2.

Fixed-rate Covered Loan subject to Regulation

Z’s Loan Estimate and Closing Disclosure

requirements

Interest rate set f orth in Closing Disclosure. If a

corrected Closing Disclosure was provided to

the borrower prior to the end of the reporting

period in which final action was taken, the

Financial Institution reports the rate stated in the

corrected disclosure. Comment 4(a)(21)-1.

Fixed-rate Covered Loan not subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

Interest rate applicable at loan closing or

account opening. Comment 4(a)(21)-1.

Variable-rate Covered Loan subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

Interest rate set f orth in Closing Disclosure. If a

corrected Closing Disclosure was provided to

the borrower prior to the end of the reporting

period in which final action was taken, the

Financial Institution reports the rate stated in the

corrected disclosure. Comment 4(a)(21)-1.

Variable-rate Covered Loan not subject to

Regulation Z’s Loan Estimate and Closing

Disclosure requirements

If rate was known when Financial Institution

closed loan or opened account, rate applicable

at loan closing or account opening. Comment

4(a)(21)-1.

91 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For an:

Report:

If rate was unknown when Financial Institution

closed loan or opened account, the fully-indexed

rate based on the index applicable to the

Covered Loan at loan closing or account

opening. Comment 4(a)(21)-3.

5.25 Introductory rate period

A Financial Institution reports the introductory rate period in the manner described below

unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

For a Covered Loan, a Financial Institution reports the introductory rate period as the number

of months from loan closing or account opening until the first date the interest rate may change.

12 CFR 1003.4(a)(26). For example, if an Open-End Line of Credit contains an introductory or

“teaser” interest rate for two months after the date of account opening and the interest rate may

adjust after that two month period, the Financial Institution reports the number of months as

“2.” Comment 4(a)(26)-1. For a Covered Loan that includes an introductory interest rate period

measured in a unit of time other than months, the Financial Institution reports the introductory

period using an equivalent number of whole months without regard for any remainder. For

example, if an Open-End Line of Credit contains an introductory interest rate for 50 days after

the date of account opening, after which the interest rate may adjust, the Financial Institution

reports the number of months as “1”. A Financial Institution reports “1” for any introductory

interest rate period that is less than one whole month. Comment 4(a)(26)-5.

For an Application, a Financial Institution reports the number of months from loan closing or

account opening until the first date the interest rate could have changed under the proposed

terms. Comment 4(a)(26)-1. If the period until the first date the interest rate could have

changed under the proposed terms is measured in a unit of time other than months, the

Financial Institution reports the introductory period using an equivalent number of whole

months without regard for any remainder. A Financial Institution reports “1” if the introductory

interest rate period could have been less than one whole month under the proposed terms.

Comment 4(a)(26)-5.

92 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution reports the number of months based on when the first interest rate

adjustment may occur, even if an interest rate adjustment is not required to occur at that time

and even if the rates that will apply, or the periods for which they will apply, are not known at

loan closing or account opening. For example, if a Closed-End Mortgage Loan has a 30-year

term and is an adjustable-rate product with an introductory interest rate for the first 60 months,

after which the interest rate is permitted but not required to vary, the Financial Institution

reports the number of months as “60.” Comment 4(a)(26)-1.

A Financial Institution is not required to report introductory interest rate periods based on

preferred rates unless the terms of the legal obligation provide that the preferred rate will expire

at a certain defined date. Preferred rates include loan terms that provide that the initial

underlying rate is fixed but that it may increase or decrease upon the occurrence of some future

event, such as an employee leaving the employ of the Financial Institution, the borrower closing

an existing deposit account with the Financial Institution, or the borrower revoking an election

to make automated payments. Comment 4(a)(26)-2.

A Financial Institution reports that this data point is not applicable for a fixed-rate Covered

Loan or an Application for a fixed-rate Covered Loan. Comment 4(a)(26)-3.

5.26 Rate spread

A Financial Institution reports the rate spread in the manner described below unless a partial

exemption applies. If a partial exemption applies, see Section 4.3.3.

For Covered Loans that are subject to

Regulation Z and for Applications that are

approved but not accepted, and that are

subject to Regulation Z (other than

assumptions, purchased Covered Loans, and

Reverse Mortgages), a Financial Institution

reports the difference between the Covered

Loan’s annual percentage rate (APR) and a comparable transaction’s average prime offer rate

(APOR) as of the date the Covered Loan’s interest rate was set. 12 CFR 1003.4(a)(12)(i).

Where an application or a preapproval

request is an Application under Regulation C,

but for which no disclosures are required

under Regulation Z, the Financial Institution

reports that the data is not applicable.

93 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If the Covered Loan is an assumption, Reverse Mortgage, a purchased Covered Loan, or is not

subject to Regulation Z, the Financial Institution reports that the data point is not applicable. If

an Application does not result in the Financial Institution originating a Covered Loan for a

reason other than that the Application was approved but not accepted by the applicant, the

Financial Institution reports that the data point is not applicable. Comment 4(a)(12)-7.

The APOR is an APR that is derived from average interest rates and other loan pricing terms

offered to borrowers by a set of creditors for mortgage loans that have low-risk pricing

characteristics. 12 CFR 1003.4(a)(12)(ii). The Bureau publishes tables of current and historical

APORs by transaction type on the FFIEC’s website at http://www.ffiec.gov/hmda

and on the

Bureau’s website at http://www.consumerfinance.gov. The methodology used to arrive at these

APORs is also published on these websites. A Financial Institution may either use the APORs

published on these websites or determine APORs itself by employing the methodology published

on these websites. A Financial Institution that determines APORs itself, however, is responsible

for correctly determining them in accordance with the published methodology. Comments

4(a)(12)-1 and -2.

To determine the reportable rate spread, a Financial Institution can follow these steps:

1. Determine the Covered Loan’s or approved but not accepted Application’s APR

A Financial Institution may rely on the APR disclosed for the Covered Loan, if it is calculated

and disclosed pursuant to Regulation Z (12 CFR 1026.18 or 1026.38 for a Closed-End

Mortgage Loan or 12 CFR 1026.6 for an Open-End Line of Credit). If multiple APRs are

calculated and disclosed pursuant to 12 CFR 1026.6, a Financial Institution relies on the

APR in effect at the time of account opening. If an Open-End Line of Credit has a variable-

rate feature and a fixed-rate feature during the draw period, a Financial Institution relies on

the APR in effect at the time of account opening for the variable-rate feature. This rate for

the variable-rate feature would be a discounted initial rate if one is offered under the

variable-rate feature. Comment 4(a)(12)-3.

If the Financial Institution provides a corrected Truth in Lending disclosure, a corrected

Closing Disclosure, or a corrected open-end account opening disclosure under Regulation Z,

the Financial Institution relies on the APR disclosed on the corrected disclosure, provided

that the corrected disclosure was provided to the borrower prior to the end of the reporting

period in which final action is taken. For this purpose, the date the corrected disclosure is

provided is the date the disclosure is mailed or delivered to the borrower in person.

Comment 4(a)(12)-9.

94 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For an Application (including a preapproval request) that was approved but not accepted, a

Financial Institution might have only provided early Regulation Z disclosures, such as a

Loan Estimate for a Closed-End Mortgage Loan or disclosures at the time of application

under 12 CFR 1026.40 for an Open-End Line of Credit. In such cases where no subsequent

disclosures are provided, a Financial Institution may rely on the APR as calculated and

disclosed in the Loan Estimate or disclosures at the time of the application under 12 CFR

1026.40, as applicable. Comment 4(a)(12)-8.

2. Determine the APOR

a. Determine the Comparable Transaction

The rate spread is calculated using the APOR for a comparable transaction. Therefore, a

Financial Institution must determine what transaction is comparable to the Covered

Loan or approved but not accepted Application. To do so, the Financial Institution uses

the Covered Loan’s or Application’s amortization type (i.e., fixed-rate or variable-rate)

and loan term. For Open-End Lines of Credit, a Financial Institution must identify the

most closely comparable closed-end transaction. Comment 4(a)(12)-4.

For fixed-rate Covered Loans and Applications, the term for identifying the comparable

transaction is the transaction’s maturity (i.e., the period until the last payment will be

due under the Closed-End Mortgage Loan contract or Open-End Line of Credit

agreement). If an Open-End Line of Credit has a fixed rate but no definite plan length, a

Financial Institution can use a 30-year fixed-rate loan as the most closely comparable

closed-end transaction. Financial Institutions may refer to the “Average Prime Offer

Rates-Fixed” table on the FFIEC website when identifying a comparable fixed-rate

transaction. Comment 4(a)(12)-4.i.

For variable-rate Covered Loans and Applications, the term for identifying the

comparable transaction is the initial, fixed-rate period (i.e., the period until the first

scheduled rate adjustment). For example, five years is the relevant term for a variable-

rate transaction with a five-year, fixed-rate introductory period that is amortized over

thirty years. If an Open-End Line of Credit has a variable rate and an optional, fixed-rate

feature, a Financial Institution uses the rate table for variable-rate transactions.

Comment 4(a)(12)-4.ii.

When the term to maturity (or, for a variable-rate transaction, the initial fixed-rate

period) is not in whole years, the Financial Institution uses the number of whole years

95 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

closest to the actual loan term (or the initial fixed-rate period). If the actual loan term

(or the initial fixed-rate period) is exactly halfway between two whole years, the

Financial Institution uses the shorter loan term. The Financial Institution rounds a term

shorter than six months to one year, including a term for a variable-rate Covered Loan

with no initial, fixed-rate period. Comment 4(a)(12)-4.iii.

If the amortization period is longer than the transaction’s term to maturity (or for an

approved but not accepted Application would have been longer than the transaction’s

term to maturity), a Financial Institution must use the term to maturity to determine the

applicable APOR. Comment 4(a)(12)-4.iv.

b. Determine the Rate Set Date

The date used to determine the APOR for a comparable transaction is the date on which

the Financial Institution set the interest rate for the final time before final action is

taken. Comment 4(a)(12)-5.

Term to Maturity or Initial Fixed-Rate Period Term for Comparable Transaction

10 years, 3 months 10 years

10 years, 9 months 11 years

10 years, 6 months 10 years

10 years, 6 months, 18 days 11 years

3 months 1 year

If the: The date used for APOR is the:

Rate was set pursuant to a lock agreement Date that the agreement fixed the interest rate

96 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If a Financial Institution received an Application from a broker and is responsible for

reporting the approved but not accepted Application or resulting Covered Loan, (e.g.,

because the Financial Institution originated the loan), the rate-set date is the last date the

Financial Institution set the rate with the broker, not the date the broker set the

borrower’s rate. Comment 4(a)(12)-5.

Lock agreement was extended, but the rate was

not re-set

Date the Financial Institution exercised its

discretion in setting the rate for final time before

f inal action is taken

Rate was re-set af ter the lock agreement was

executed, and there was no program change

Date that the Financial Institution exercised its

discretion in setting the rate for final time before

f inal action is taken

Rate was re-set af ter the lock agreement was

executed, and there was a program change

Date of the program change, unless the

Financial Institution changed the promised rate

to the rate that would have been available to the

borrower under the new program on the date of

the original rate-lock, and the Financial

Institution consistently follows that practice or

the original lock agreement required that the

new program’s rate as of the original rate-lock

would be available. In that case, the date of the

original rate-lock.

Applicant or borrower did not execute a lock

agreement

Date on which the Financial Institution set the

rate f or f inal time before final action is taken

Example: Borrower locks a rate of 2.5 percent on June 1 for a 30-year, variable-rate loan with a

5-year, fixed-rate introductory period. On June 15, the borrower decides to switch to a 30-year,

fixed-rate loan, and the rate available to the borrower for that product on June 15 is 4.0 percent.

On June 1, the 30-year, fixed-rate loan would have been available to the borrower at a rate of 3.5

percent. Ficus Bank offers the borrower the 3.5 percent rate (i.e., the rate that would have been

available to the borrower for the fixed-rate product on June 1, the date of the original rate-lock)

because the original agreement so provided or because Ficus Bank consistently follows that

practice for borrowers who change loan programs. Ficus Bank should use June 1 as the rate-set

date.

97 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

c. Determine the Most Recently Available APOR as of Rate Set Date

A Financial Institution must compare the APR determined in Step 1 to the most recently

available APOR that was in effect for the comparable transaction as of the rate-set date.

The most recently available rate means the APOR set forth in the applicable table with

the most recent effective date as of the date the interest rate was set. A Financial

Institution cannot use an APOR before its effective date. Comment 4(a)(12)-6.

3. Determine the Rate Spread

A Financial Institution compares the APOR determined in step 2c, above, to the APR

determined in step 1 above. Comment 4(a)(12)-6.

5.27 Non-amortizing features

A Financial Institution reports non-amortizing features in the manner described below unless a

partial exemption applies. If a partial exemption applies, see Section 4.3.3.

A Financial Institution reports whether the contractual terms include or would have included:

(1) a balloon payment; (2) interest-only payments; (3) negative amortization; or (4) contractual

terms, other than those listed above, that would allow for payments other than fully amortizing

payments. 12 CFR 1003.4(a)(27). The HMDA Rule defines the terms balloon payment, interest-

only payments, negative amortization, and fully amortizing payments by reference to Regulation

Z, but without regard to whether the Covered Loan is subject to Regulation Z. Comment

4(a)(27). See 12 CFR 1026.18(s)(5)(i) for the definition of balloon payment, 12 CFR

1026.18(s)(7)(iv) for the definition of interest-only payments, and 12 CFR 1026.18(s)(7)(v) for

information on when a contractual term would include negative amortization.

98 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.28 Data points for certain loans subject to

Regulation Z

5.28.1 Total loan costs or total points and fees

A Financial Institution reports the total loan costs or total points and fees in the manner

described below unless a partial exemption applies. If a partial exemption applies, see Section

4.3.3.

For Covered Loans subject to the Ability-to-Repay provisions of Regulation Z, 12 CFR 1026.43, a

Financial Institution reports the following:

1. The amount of total loan costs as disclosed, pursuant to Regulation Z, on Line D

of the Closing Cost Details page of the Closing Disclosure. The Financial Institution

reports the total loan costs if a Closing Disclosure was provided for the Covered Loan.

12 CFR 1003.4(a)(17)(i).

Financial Institutions report that this data point is not applicable for transactions that are

not subject to the Ability-to-Repay provisions of Regulation Z, such as Open-End Lines of

Credit, Reverse Mortgages, and Covered Loans made primarily for business or commercial

purposes. Comment 4(a)(17)(i)-1. For transactions subject to the Ability-to-Repay

provisions of Regulation Z for which a Closing Disclosure was not provided, Financial

Institutions report that this data point is not applicable. 12 CFR 1003.4(a)(17). Financial

Institutions also report that this data point is not applicable for purchased Covered Loans for

Example: Ficus Bank originates a business-purpose transaction that is exempt from

Regulation Z. The borrower, a corporation, uses the loan proceeds to finance the purchase

of a Multifamily Dwelling. The loan is secured by a mortgage on the Multifamily Dwelling.

The loan includes a balloon payment, as defined by Regulation Z, 12 CFR 1026.18(s)(5)(i),

at the end of the loan term. Even though the borrower is not a natural person, the loan is

for a business purpose, and a Multifamily Dwelling is not a “dwelling” under Regulation Z,

Ficus Bank reports the business-purpose transaction as having a balloon payment.

99 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

which Applications were received by the selling entity prior to October 3, 2015. Comment

4(a)(17)(i)-2.

2. The total points and fees charged in connection with the Covered Loan,

calculated pursuant to Regulation Z. The Financial Institution reports the total points

and fees if the Covered Loan is not subject to Regulation Z’s Closing Disclosure requirements

and is not a purchased Covered Loan. 12 CFR 1003.4(a)(17)(ii).

Financial Institutions report that this data point is not applicable for transactions that are

not subject to the Ability-to-Repay provisions of Regulation Z, such as Open-End Lines of

Credit, Reverse Mortgages, and Covered Loans made primarily for business or commercial

purposes. Comment 4(a)(17)(ii)-1. For transactions subject to the Ability-to-Repay

provisions of Regulation Z for which a Closing Disclosure was provided, Financial

Institutions report that this data point is not applicable. 12 CFR 1003.4(a)(17). Financial

Institutions also report that this data point is not applicable for purchased Covered Loans.

Comment 4(a)(17)(ii)-1.

For Covered Loans subject to the total loan cost reporting requirement, if the amount of total

loan costs changes because a Financial Institution provides a corrected Closing Disclosure, the

Financial Institution reports the amount disclosed in the corrected Closing Disclosure if the

corrected Closing Disclosure was provided to the borrower prior to the end of the reporting

period in which loan closing occurred. For this purpose, the date the corrected Closing

Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on the

corrected Closing Disclosure. Comment 4(a)(17)(i)-3.

For Covered Loans subject to the total points and fees reporting requirement, if a Financial

Institution determines that the transaction’s total points and fees exceeded the applicable limit

and cures the overage pursuant to Regulation Z during the same reporting period in which

closing occurred, the Financial Institution reports the revised amount of total points and fees.

Comment 4(a)(17)(ii)-2.

Example: Ficus Bank is required to submit HMDA data quarterly. It closes a

Covered Loan on January 2, 2020, and cures an overage pursuant to Regulation Z on

January 9, 2020. Ficus Bank reports the revised amount of total points and fees in

both its quarterly LAR submitted for first quarter data by May 30, 2020 and its annual

LAR submitted in 2021 for 2020 data.

100 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5.28.2 Total borrower-paid origination charges

A Financial Institution reports the total borrower-paid origination charges in the manner

described below unless a partial exemption applies. If a partial exemption applies, see Section

4.3.3.

For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR

1026.19(f), the Financial Institution reports the total of all itemized origination charges that are

designated borrower-paid at or before closing. 12 CFR 1003.4(a)(18). This total is disclosed on

Line A of the Closing Cost Details page of the Closing Disclosure.

For all other transactions, the Financial Institution reports that the data point is not applicable.

A Financial Institution reports that the data point does not apply for purchased Covered Loans

for which Applications were received by the seller prior to the effective date of the Closing

Disclosure requirements of Regulation Z. Comments 4(a)(18)-1 and -2.

If the total amount of borrower-paid origination charges changes because a Financial Institution

provides a corrected Closing Disclosure pursuant to Regulation Z prior to the end of the

reporting period in which the loan closing occurred, the Financial Institution reports the

amount disclosed in the corrected Closing Disclosure. For this purpose, the date the corrected

Closing Disclosure was provided to the borrower is the date disclosed as the “Date Issued” on

the corrected Closing Disclosure. Comment 4(a)(18)-3.

5.28.3 Total discount points

A Financial Institution reports the total discount points in the manner described below unless a

partial exemption applies. If a partial exemption applies, see Section 4.3.3.

For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR

1026.19(f), a Financial Institution reports the points paid to the creditor to reduce the interest

rate. 12 CFR 1003.4(a)(19). This total is disclosed on Line A.01 of the Closing Cost Details page

of the Closing Disclosure.

For all other transactions, a Financial Institution reports that the data point is not applicable.

101 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution reports that the data point does not apply for purchased Covered Loans

for which an Application was received by the seller prior to the effective date of the Closing

Disclosure requirements of Regulation Z. Comments 4(a)(19)-1 and -2.

If the total discount points change because a Financial Institution provides a corrected Closing

Disclosure pursuant to Regulation Z prior to the end of the reporting period in which the loan

closing occurred, the Financial Institution reports the amount disclosed in the corrected Closing

Disclosure. For this purpose, the date the corrected Closing Disclosure was provided to the

borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure.

Comment 4(a)(19)-3.

5.28.4 Lender credits

A Financial Institution reports lender credits in the manner described below unless a partial

exemption applies. If a partial exemption applies, see Section 4.3.3.

For Covered Loans subject to the Closing Disclosure requirements of Regulation Z, 12 CFR

1026.19(f), the Financial Institution reports the amount of lender credits.

12 CFR 1003.4(a)(20). This total is disclosed in the second row under Line J on the Closing Cost

Details page of the Closing Disclosure. For all other transactions, the Financial Institution

reports that the data point is not applicable.

A Financial Institution reports that the data point does not apply for purchased Covered Loans

for which an Application was received by the seller prior to the effective date of the Closing

Disclosure requirements of Regulation Z. Comments 4(a)(20)-1 and -2.

If the amount of the lender credits changes because a Financial Institution provides a corrected

Closing Disclosure pursuant to Regulation Z prior to the end of the reporting period in which the

loan closing occurred, the Financial Institution reports the amount disclosed in the corrected

Closing Disclosure. For this purpose, the date the corrected Closing Disclosure was provided to

the borrower is the date disclosed as the “Date Issued” on the corrected Closing Disclosure.

Comment 4(a)(20)-3.

5.28.5 Prepayment penalty term

A Financial Institution reports the prepayment penalty term in the manner described below

unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

102 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

For Covered Loans and Applications subject to Regulation Z, other than Reverse Mortgages or

purchased Covered Loans, a Financial Institution reports the term of any prepayment penalty.

The term is reported in months. 12 CFR 1003.4(a)(22). A Financial Institution may rely on the

definitions and official commentary to Regulation Z, 12 CFR 1026.32(b)(6)(i) or (ii), in

determining whether a Covered Loan includes a prepayment penalty.

For Covered Loans that are not subject to Regulation Z, Reverse Mortgages, purchased Covered

Loans, and Covered Loans or Applications that have no prepayment penalty, the Financial

Institution reports that this data point is not applicable.

5.28.6 HOEPA status

For a Covered Loan that is subject to the Home Ownership and Equity Protection Act of 1994

(HOEPA), as implemented in Regulation Z, 12 CFR 1026.32, the Financial Institution reports

whether or not the Covered Loan is a high-cost mortgage under Regulation Z.

12 CFR 1003.4(a)(13). Generally, a Financial Institution will report whether or not a consumer

credit transaction subject to Regulation Z and secured by a principal dwelling (as that term is

interpreted under Regulation Z) is a high-cost mortgage. See 12 CFR 1026.32(a) and its official

commentary to determine whether a Covered Loan is subject to HOEPA and whether or not it is

a high-cost mortgage under Regulation Z. For an Application or a Covered Loan that is not

subject to HOEPA, the Financial Institution reports that this data point is not applicable.

Comment 4(a)(13).

5.29 Transaction indicators

A Financial Institution reports the transaction indicators in the manner described below unless

a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

A Financial Institution separately reports whether or not a Covered Loan is or an Application is

for:

103 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

1. A Reverse Mortgage.

12 CFR 1003.4(a)(36);

2. An Open-End Line of Credit.

12 CFR 1003.4(a)(37); and

3. A loan made primarily for a business or commercial purpose.

12 CFR 1003.4(a)(38).

5.30 Mortgage loan originator identifier

A Financial Institution reports the mortgage loan originator identifier in the manner described

below unless a partial exemption applies. If a partial exemption applies, see Section 4.3.3.

A Financial Institution reports the Nationwide Mortgage Licensing System and Registry

identifier (NMLSR ID) for the mortgage loan originator, as defined in Regulation G, 12 CFR Part

1007, or Regulation H, 12 CFR Part 1008, as applicable. 12 CFR 1003.4(a)(34). The NMLSR ID

is a unique number or other identifier generally assigned to an individual registered or licensed

through NMLSR to provide loan originating services. For more information, see the Secure and

Fair Enforcement for Mortgage Licensing Act of 2008, title V of the Housing and Economic

Recovery Act of 2008, 12 U.S.C. 5101 et seq., and Regulation G or Regulation H, as applicable.

Comment 4(a)(34)-1.

An NMLSR ID for the mortgage loan originator is not required to be reported if the mortgage

loan originator is not required to obtain and has not been assigned an NMLSR ID. In those

cases, the Financial Institution reports that this data point is not applicable. For example,

certain individual mortgage loan originators may not be required to obtain an NMLSR ID for the

particular transaction being reported, such as a commercial loan, and may not have an NMLSR

ID.

A Reverse Mortgage is a Closed-End Mortgage Loan or Open-End Line of Credit that is a reverse mortgage

transaction as defined in Regulation Z, but without regard to whether the loan or line is secured by a principal

dwelling. 12 CFR 1003.2(q).

For more information on whether a Covered Loan is or an Application is for an Open-End Line of Credit, see

Section 4.1.1.

If a Covered Loan or Application is deemed to be primarily for a business or commercial purpose under Regulation

Z, 12 CFR 1026.3(a) and its official commentary, it is also deemed to be for a business or commercial purpose under

the HMDA Rule.

104 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Some mortgage loan originators may have obtained an NMLSR ID even if they are not required

to obtain one for the particular transaction. Generally, if a mortgage loan originator has been

assigned an NMLSR ID, a Financial Institution reports the mortgage loan originator’s NMLSR

ID regardless of whether the mortgage loan originator is required to obtain an NMLSR ID for

the particular transaction being reported. Comment 4(a)(34)-2. However, there are special

rules for certain purchased Covered Loans. If a Financial Institution purchases a Covered Loan

that is subject to 12 CFR 1026.36(g) and that was originated prior to January 10, 2014, the

Financial Institution may report that the data point is not applicable or may report the NMLSR

ID. If a Financial Institution purchases a Covered Loan that is not subject to 12 CFR 1026.36(g)

and that was originated prior to January 1, 2018, the Financial Institution may report that the

data point is not applicable or may report the NMLSR ID.

If more than one individual associated with a Covered Loan or Application meets the definition

of “mortgage loan originator,” as defined in Regulation G or Regulation H, a Financial

Institution reports the NMLSR ID of the individual mortgage loan originator with primary

responsibility for the transaction as of the date of action taken. A Financial Institution that

establishes and follows a reasonable, written policy for determining which individual mortgage

loan originator has primary responsibility for the reported transaction as of the date of action

taken complies with this reporting requirement. Comment 4(a)(34)-3.

5.31 Type of purchaser

A Financial Institution reports the type of purchaser for a Covered Loan if the Financial

Institution: (a) originated the Covered Loan it is reporting and sold it within the same calendar

year; or (b) purchased the Covered Loan it is reporting and then sold it within the same calendar

year. 12 CFR 1003.4(a)(11). When reporting the type of purchaser, a Financial Institution

reports the type of entity that purchased the Covered Loan from the Financial Institution, using

one of the following:

1. Fannie Mae.

2. Ginnie Mae.

3. Freddie Mac.

4. Farmer Mac.

105 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

5. Private securitizer, which is an entity (other than one of the government-sponsored

enterprises listed in 1 through 4 immediately above) that the Financial Institution knows or

reasonably believes will securitize the Covered Loan. Knowledge or reasonable belief could, for

example, be based on the purchase agreement or other related documents, the Financial

Institution’s previous transactions with the purchaser, or the purchaser’s role as a securitizer

(such as an investment bank). If the Financial Institution selling the Covered Loan does not

know or reasonably believe that the purchaser will securitize the loan, and the seller knows that

the purchaser frequently holds or disposes of loans by means other than securitization, then the

Financial Institution reports the Covered Loan as purchased by, as appropriate, one of the other

types of purchasers. Comment 4(a)(11)-4.

If the purchaser meets the criteria to be a private securitizer and fits within one of the other

reportable categories in 6 through 10 below (including affiliate institution), the Financial

Institution reports that the purchaser is a private securitizer. Comment 4(a)(11)-4.

6. Affiliate institution, which means a company that controls, is controlled by, or is under

common control with the Financial Institution. The term has the meaning set forth in the Bank

Holding Company Act of 1956, 12 U.S.C. 1841 et seq. If a purchaser meets the criteria to be an

affiliate institution and also fits within one of the other reportable types of purchaser in 7

through 10 below (but not private securitizer above), the Financial Institution reports that the

purchaser is an affiliate institution. Comment 4(a)(11)-3.

7. Commercial bank, savings bank, or savings association.

8. Credit union, mortgage company, or finance company. A mortgage company is a

nondepository institution that purchases Covered Loans and, typically, originates Covered

Loans. Comment 4(a)(11)-5.

9. Life insurance company.

10. Other, which is a purchaser that is not any of the above. A Financial Institution would report

the purchaser type of “other” if the purchaser was a bank holding company or thrift holding

company that is not a private securitizer and is not an affiliate of the Financial Institution.

Comment 4(a)(11)-7.

If a Financial Institution sells some interest or interests in a Covered Loan but retains a majority

interest in that Covered Loan, the Financial Institution does not report the sale or type of

purchaser (i.e., it reports that this data point is not applicable). Comment 4(a)(11)-1.

106 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If a Financial Institution sells all or a majority interest in the Covered Loan to more than one

entity, the Financial Institution reports the type of purchaser based on the entity purchasing the

greatest interest in the Covered Loan. Comment 4(a)(11)-1.

Covered Loans “swapped” for mortgage-backed securities are to be treated as sales, and the

purchaser is the entity receiving the Covered Loans that are swapped. Comment 4(a)(11)-2.

A Financial Institution reports that this data point is not applicable:

1. If a Financial Institution sells some interest or interests in a Covered Loan but retains a

majority interest in the loan;

2. For an Application that is denied, withdrawn, closed for incompleteness, or approved but

not accepted; or

3. For a Covered Loan that the Financial Institution does not sell during the same calendar

year that it originated or purchased the Covered Loan. Comments 4(a)(11)-1 and -10.

A Financial Institution records that the requirement to report type of purchaser is not applicable

if the Financial Institution originated or purchased a Covered Loan and did not sell it during the

calendar quarter for which the Financial Institution is recording the data. If the Financial

Institution sells the Covered Loan in a subsequent quarter of the same calendar year, the

Financial Institution records the type of purchaser on its LAR for the quarter in which the

Covered Loan was sold. If a Financial Institution sells the Covered Loan in a succeeding year,

the Financial Institution should not record or report the sale. Comment 4(a)(11)-9.

107 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

6. Recording and reporting

6.1 Recording

The HMDA Rule requires a Financial Institution to record the data about a Covered Loan or

Application on a LAR within 30 calendar days after the end of the calendar quarter in which the

Financial Institution takes final action on the Application or Covered Loan. 12 CFR 1003.4(f). A

Financial Institution is not required to

record all of its HMDA data for a quarter on

a single LAR. Rather, a Financial Institution

may record data on a single LAR or may

record data on one or more LARs for

different branches or different loan types

(such as Home Purchase Loans or Home

Improvement Loans, or loans on

Multifamily Dwellings). Comment 4(f)-1.

Other State or Federal regulations may

require a Financial Institution to record its

data on a LAR more frequently. Comment

4(f)-2.

Financial Institutions may maintain their

quarterly records in electronic or any other

format, provided they can make the

information available to their regulatory

agencies in a timely manner upon request.

Comment 4(f)-3.

The 2020 HMDA Thresholds Rule amended

Regulation C’s institutional coverage

threshold for closed-end mortgage loans as of

July 1, 2020. Pursuant to § 1003.4(f),

financial institutions that originated fewer

than 100 closed-end mortgage loans during

2018 or 2019, but more at least 25 closed-end

mortgage loans in 2018 and 2019 and meet

all of the other requirements under

§ 1003.2(g), must still record data on a

loan/application register for the first quarter

of 2020 by 30 calendar days after the end of

the first quarter of 2020. These financial

institutions are not, however, required to

record closed-end data for the second or

third quarters of 2020 because the deadline

under § 1003.4(f) for recording such data

falls after July 1, 2020. These financial

institutions are also not required to report

HMDA data collected in 2020 on closed-end

mortgage loans (including closed-end data

collected in 2020 before July 1).

108 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

6.2 Reporting

In addition to the required data discussed in Section 5, above, effective January 1, 2019, a

Financial Institution must include the following when it submits its HMDA data:

1. Its name;

2. The calendar year and, effective January 1, 2020, if applicable, the calendar quarter to which

the data relate (see Section 6.2.2 for information on quarterly reporting);

3. The name and contact information for a person who can be contacted with questions about

the submission;

4. The Financial Institution’s appropriate Federal agency;

5. The total number of entries in the submission;

6. The Financial Institution’s Federal Taxpayer Identification Number (TIN); and

7. The Financial Institution’s LEI. 12 CFR 1003.5(a)(3).

If the appropriate Federal agency for a Financial Institution changes, the Financial Institution

must identify its new appropriate Federal agency in its annual submission for the year of the

change. Comment 5(a)-2. For example, if a Financial Institution’s appropriate Federal agency

changes in February 2018, it must identify its new appropriate Federal agency beginning with its

annual submission of 2018 data by March 1, 2019. For a Financial Institution required to

comply with quarterly reporting requirements (see Section 6.2.2), the Financial Institution also

must identify its new appropriate Federal agency in its quarterly submission beginning with its

submission for the quarter of the change, unless the change occurs during the fourth quarter.

For example, if the appropriate Federal agency for a Financial Institution changes during

February 2020, the Financial Institution must identify its new appropriate Federal agency

beginning with its quarterly submission for the first quarter of 2020. Comment 5(a)-2.

If a Financial Institution obtains a new TIN, it must provide the new TIN in its subsequent data

submissions. For example, if two Financial Institutions that previously reported HMDA data

merge and the surviving Financial Institution retained its LEI but obtained a new TIN, the

surviving Financial Institution reports the new TIN beginning with its next HMDA data

submission. Comment 5(a)-5.

109 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution that is a subsidiary of a bank or savings association must complete its

own LAR and submit it, directly or through its parent, to the appropriate Federal agency for the

subsidiary’s parent. 12 CFR 1003.5(a)(2). A Financial Institution is a subsidiary of a bank or

savings association (for purposes of reporting HMDA data to the same agency as the parent) if

the bank or savings association holds or controls an ownership interest in the Financial

Institution that is greater than 50 percent. Comment 5(a)-6.

6.2.1 Annual reporting

The HMDA Rule maintains the annual reporting requirement, but requires Financial

Institutions to submit data electronically in accordance with the procedures published by the

Bureau and posted at http://www.consumerfinance.gov/hmda

. 12 CFR 1003.5(a)(5).

Under the HMDA Rule, a Financial Institution must submit its annual LAR in electronic format

to its appropriate Federal agency by March 1 of the year following the calendar year for which

data are collected. Appendix A to Part 1003 (through December 31, 2018);

12 CFR 1003.5(a)(1)(i) (after December 31, 2018). An individual who is an authorized

representative of the Financial Institution and who has knowledge regarding the submitted data

must certify its accuracy and completeness. Appendix A to Part 1003 (through December 31,

2018); 12 CFR 1003.5(a)(1)(i) (after December 31, 2018).

A Financial Institution must retain a copy of its submitted annual LAR for at least three years.

12 CFR 1003.5(a)(1)(i). Financial Institutions may retain their annual LARs in either paper or

electronic form. Comment 5(a)-4.

For more information on reporting under the HMDA Rule or on the electronic submission of

data, please see http://www.consumerfinance.gov/hmda

6.2.2 Quarterly reporting

The HMDA Rule requires some Financial Institutions to report data on a quarterly basis as well

as on an annual basis. The quarterly reporting requirement is effective January 1, 2020. It

applies to a Financial Institution that reported at least 60,000 originated Covered Loans and

Applications (combined) for the preceding calendar year. The Financial Institution does not

count purchased Covered Loans when determining whether the quarterly reporting requirement

applies. If quarterly reporting is required, the Financial Institution must report all data

110 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

required to be recorded for the calendar quarter within 60 calendar days after the end of the

calendar quarter. The quarterly reporting requirement does not apply, however, to the fourth

quarter of the year. A Financial Institution subject to the quarterly reporting requirement

reports its fourth quarter data as part of its annual submission. In its annual submission, a

quarterly reporter will resubmit the data previously submitted for the first three calendar

quarters of the year, including any corrections to the data, as well as its fourth quarter data.

12 CFR 1003.5(a)(ii).

As of March 26, 2020, and until further notice, the Bureau does not intend to cite in an

examination or initiate an enforcement action against any institution for failure to report its

HMDA data quarterly. At a later date, the Bureau will provide information as to how and when

it expects institutions under its jurisdiction to resume quarterly HMDA data submissions.

Entities should continue collecting and recording HMDA data in anticipation of making annual

data submissions. Entities may continue making quarterly HMDA data submissions even

though the Bureau does not intend to cite or take any actions against them if they do not do so.

See the Bureau’s

Statement on Supervisory and Enforcement Practices Regarding Quarterly

Reporting Under the Home Mortgage Disclosure Act for more informaiton.

6.3 Disclosure of data

6.3.1 Disclosure statement

Effective January 1, 2018, the HMDA Rule changes Regulation C’s disclosure statement

requirements. The changes apply to data collected in 2017 and later years. Under the HMDA

Rule, the FFIEC shall provide a notice to the Financial Institution that the Financial Institution’s

disclosure statement (based on data submitted for the prior calendar year) is available.

12 CFR 1003.5(b)(1). No later than three business days (any calendar day other than a Saturday,

Sunday, or legal public holiday) after receiving notice from the FFIEC, the Financial Institution

must make available to the public, upon request, a written notice that clearly conveys that the

Financial Institution’s disclosure statement may be obtained on the Bureau’s website at .

12 CFR 1003.5(b)(2); comment 5(b)-1. A Financial Institution may, but is not required to, use

the sample notice in Attachment C

to satisfy the HMDA Rule’s disclosure statement

requirement. The notice may be made available in paper or electronic form. Comment 5(b)-2.

111 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

A Financial Institution must make the notice available to the public for a period of five years.

12 CFR 1003.5(d)(1).

At its discretion, a Financial Institution may also provide its disclosure statement and impose a

reasonable fee for costs incurred reproducing or providing the statement. 12 CFR 1003.5(d)(2).

Even if it provides the disclosure statement, a Financial Institution must comply with the notice

requirement.

6.3.2 Modified LAR

Effective January 1, 2018, the HMDA Rule changes a Financial Institution’s obligations with

respect to disclosing its modified LAR. The new requirements apply to data collected in 2017

and later years.

Beginning in 2018, upon request from a member of the public, a Financial Institution must

provide a written notice regarding the availability of its modified LAR. The written notice must

clearly convey that the Financial Institution’s LAR, as modified by the Bureau to protect

borrower and applicant privacy, may be obtained on the Bureau’s website at

http://www.consumerfinance.gov/hmda. 12 CFR 1003.5(c).

A Financial Institution may, but is not required to, use the sample notice in Attachment C to

satisfy the HMDA Rule’s modified LAR requirement. Comment 5(c)-2. A Financial Institution

may, but is not required to, use the same notice for purposes of this disclosure requirement and

the disclosure statement requirement discussed in Section 6.3.1. The notice may be made

available in paper or electronic form. Comment 5(c)-1.

The notice must be made available in the calendar year following the calendar year for which the

Financial Institution collected data. The notice must be made available for three years.

12 CFR 1003.5(d)(1). For example, in calendar year 2021, a Financial Institution must make

available a notice that its modified LAR is available on the Bureau’s website if it was required to

collect data in 2018, 2019, or 2020.

At its discretion, a Financial Institution may also provide its LAR, as modified by the Bureau,

and impose a reasonable fee for any costs incurred to reproduce or provide the data.

12 CFR 1003.5(d)(2). Even if it decides to provide the modified LAR, a Financial Institution

must comply with the notice requirement.

112 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

6.3.3 Posted notices

The HMDA Rule modifies Regulation C’s posting requirement. Beginning January 1, 2018, a

Financial Institution must post, in the lobby of its home office and each Branch Office physically

located in an MSA or MD, a general notice about the availability of its HMDA data on the

Bureau’s website. 12 CFR 1003.5(e). A Financial Institution may, but is not required to, use the

sample notice in Attachment C

to satisfy this requirement. In any case, the notice must clearly

convey that the Financial Institution’s HMDA data are available on the Bureau’s website at

http://www.consumerfinance.gov/hmda. Comment 5(e).

6.3.4 Aggregated data

The FFIEC will use the annual data submitted pursuant to the HMDA Rule to make available

aggregated data for each MSA and MD, showing lending patterns by property location, age of

housing stock, and income level, sex, ethnicity, and race. 12 CFR 1003.5(f).

113 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

7. Enforcement provisions

A violation of Regulation C, both before and after the effective date of the HMDA Rule, is subject

to administrative sanctions, including civil money penalties. Compliance can be enforced by the

Federal Reserve Board, Federal Deposit Insurance Corporation, the Office of the Comptroller of

Currency, the National Credit Union Administration, HUD, or the Bureau.

An error in compiling or recording data for a Covered Loan or Application is not a violation of

HMDA or Regulation C if the error was unintentional and occurred despite maintenance of

procedures reasonably adapted to avoid such errors. 12 CFR 1003.6(b)(1). However, a Financial

Institution that obtains the property-location information for Applications and Covered Loans

from third parties is responsible for ensuring that the information reported is correct. An

incorrect entry for a census tract number is deemed a bona fide error and is not a violation if the

Financial Institution maintains procedures reasonably adapted to avoid such an error.

12 CFR 1003.6(b)(2). Additionally, a census tract error is not a violation of HMDA or

Regulation C if the Financial Institution obtained the census tract number from a geocoding tool

on the Bureau’s website. However, a Financial Institution’s failure to provide the correct census

tract number because the geocoding tool did not provide any census tract number for the

property address is not excused as a bona fide error. Similarly, the failure to enter the correct

census tract number because the Financial Institution entered an incorrect property address

into the geocoding tool is not excused as a bona fide error. Comment 6(b)-2.

If a Financial Institution makes a good-faith effort to record all data fully and accurately within

30 calendar days after the end of the calendar quarter as required under the HMDA Rule, but

some data are inaccurate or incomplete, the inaccuracy or omission is not a violation of HMDA

or Regulation C if the Financial Institution corrects or completes the data prior to submitting its

annual LAR. 12 CFR 1003.6(c)(1).

If a Financial Institution that is required to submit quarterly data makes a good-faith effort to

report all data fully and accurately within 60 calendar days as required under the HMDA Rule,

but some data are inaccurate or incomplete, the inaccuracy or omission is not a violation of

HMDA or Regulation C if the Financial Institution corrects or completes the data prior to

submitting its annual LAR. 12 CFR 1003.6(c)(2).

114 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

8. Mergers and acquisitions

8.1 Determining coverage

After a merger or acquisition, the surviving or newly formed institution is subject to Regulation

C, effective January 1, 2018, if it satisfies the coverage criteria for either a Depository Financial

Institution or a Nondepository Financial Institution. See Section 3 for more information on

institutional coverage. When determining whether the institution is covered, the surviving or

newly formed institution must consider the combined assets, locations, and lending activities of

the surviving or newly formed entity and the merged or acquired entities or acquired branches.

Comment 2(g)-3.

8.2 Reporting responsibility for calendar

year of merger or acquisition

The following discusses the applicability of the HMDA Rule during the calendar year of a merger

or acquisition:

If two institutions that are not subject to Regulation C merge, but the newly formed or surviving

institution is subject to Regulation C, no data collection is required for the calendar year of the

merger.

When a branch office of an institution that is not subject to Regulation C is acquired by another

institution that is not subject to Regulation C, and the acquisition results in the acquiring

institution becoming subject to Regulation C, no data collection is required for the calendar year

of the acquisition.

If an institution that is subject to Regulation C and an institution that is not subject to

Regulation C merge, and the surviving or newly formed institution is subject to Regulation C, for

the calendar year of the merger, data collection is required for Covered Loans and Applications

handled in the offices of the institution that was previously subject to Regulation C. For the

calendar year of the merger, data collection is optional for Covered Loans and Applications

handled in offices of the institution that was not previously subject to Regulation C.

115 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

When an institution that is subject to Regulation C acquires a branch office of an institution that

is not subject to Regulation C, data collection is optional for Covered Loans and Applications

handled by the acquired branch office for the calendar year of the acquisition.

If an institution that is subject to Regulation C and an institution that is not subject to

Regulation C merge and the surviving or newly formed institution is not subject to Regulation C,

data collection is required for Covered Loans and Applications handled prior to the merger in

the previously covered institution’s offices. After the merger date, data collection is optional for

Covered Loans and Applications handled in the offices of the institution that was previously

covered.

When an institution that is not subject to Regulation C acquires a Branch Office of an institution

that is subject to Regulation C but that acquisition does not result in the acquiring institution

becoming subject to Regulation C, data collection is required for transactions of the acquired

Branch Office that take place prior to the acquisition. Data collection by the acquired Branch

Office is optional for transactions taking place in the remainder of the calendar year of the

acquisition.

If two or more institutions that are subject to Regulation C merge and the surviving or newly

formed institution is also subject to Regulation C, data collection is required for the entire

calendar year of the merger. The surviving or newly formed Financial Institution files either a

consolidated submission or separate submissions for that calendar year.

When one institution subject to Regulation C acquires a Branch Office of another covered

institution, data collection is required for the entire calendar year of the merger. Data for the

acquired Branch Office may be submitted by either Financial Institution. Comment 2(g)-4.

8.3 Changes to appropriate Federal agency

or TIN

Under the HMDA Rule, if the appropriate Federal agency for a Financial Institution changes,

the Financial Institution must identify its new appropriate Federal agency in its annual

submission for the year of the change. For example, if a Financial Institution’s appropriate

Federal agency changes in February 2019, it must identify its new appropriate Federal agency

beginning with the annual submission of its 2019 data by March 1, 2020. For a Financial

Institution required to comply with quarterly reporting requirements, the Financial Institution

also must identify its new appropriate Federal agency in its quarterly submissions, beginning

116 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

with its submission for the quarter of the change, unless the change occurs during the fourth

quarter. Comment 5(a)-2. For example, if the appropriate Federal agency for a Financial

Institution changes during February 2020, the Financial Institution must identify its new

appropriate Federal agency beginning with its quarterly submission for the first quarter of 2020.

If a Financial Institution obtains a new TIN, it should provide the new number in its subsequent

data submission. For example, if two Financial Institutions that previously reported HMDA

data merge and the surviving Financial Institution retained its LEI but obtained a new TIN, then

the surviving Financial Institution should report the new TIN with its next HMDA data

submission. Comment 5(a)-5.

8.4 Determining quarterly reporting

coverage

In the calendar year of a merger, the HMDA Rule requires a surviving or newly formed Financial

Institution to report quarterly, beginning with the first quarterly submission due date after the

date of the merger, if when added together the surviving or newly formed Financial Institution

and all Financial Institutions that merged reported at least 60,000 originated Covered Loans

and Applications for the preceding calendar year. Similarly, in the calendar year of an

acquisition, the surviving Financial Institution is required to report quarterly, beginning with

the first quarterly submission due date after the date of the acquisition, if when added together

the surviving Financial Institution and the acquired Financial Institution(s) or Branch Office(s)

reported at least 60,000 originated Covered Loans and Applications for the preceding calendar

year. If a Financial Institution acquires one or more Branch Offices of another Financial

Institution but does not acquire the Financial Institution, it is required to count only the

originated Covered Loans and Applications for the Branch Offices(s) that it acquired. Comment

5(a)-1.ii.

In the calendar year following a merger or acquisition, the surviving or newly formed Financial

Institution is required to comply with the quarterly reporting requirements if a combined total

of at least 60,000 originated Covered Loans and Applications is reported for the preceding

calendar year by or for the surviving or newly formed Financial Institution and each Financial

Institution or Branch Office that merged or was acquired. Comment 5(a)-1.iii.

117 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

8.5 Applicability of partial exemptions under

the 2018 Act after a merger or

acquisition

Effective January 1, 2020, following a merger or acquisition, the surviving or newly formed

Financial Institution is eligible for partial exemptions if the combined lending activity of the

surviving or newly formed Financial Institution and the merged or acquired institutions or

acquired branches fall below the threshold under § 1003.3(d)(2) or (3). Comment 3(d)-1.

Following a merger or acquisition, the surviving or newly formed Financial Institution is not

eligible for partial exemptions if either it or any of the institutions it acquired or with which it

merged received a rating of “needs to improve record of meeting community credit needs”

during each of its two most recent CRA examinations or a rating of “substantial noncompliance

meeting community credit needs on its most recent CRA examination.” Comment 3(d)-2.

The scenarios below discuss the application of partial exemptions under the HMDA Rule during

the calendar year of a merger or acquisition. The scenarios refer to the partial exemptions for

closed-end mortgage loans under § 1003.3(d)(2), but the same principles apply to the partial

exemptions with respect to open-end lines of credit under § 1003.3(d)(3).

If two institutions eligible for the partial exemption for closed-end mortgage loans merge and

the surviving or newly formed Financial Institution meets all of the requirements for the partial

exemption, the partial exemption for closed-end mortgage loans applies for the calendar year of

the merger. Comment 3(d)-3.i.

If two institutions eligible for the partial exemption for closed-end mortgage loans merge and

the surviving or newly formed Financial Institution does not meet the requirements for the

partial exemption, collection of optional data on closed-end mortgage loans is permitted but not

required for the calendar year of the merger (even though the merger creates a Financial

Institution that does not meet the requirements for the partial exemptions for closed-end

mortgage loans). If a branch office of a Financial Institution that is eligible for the partial

exemption is acquired by another Financial Institution that is eligible for the partial exemption,

and the acquisition results in a Financial Institution that is not eligible for the partial exemption,

collection of optional data for closed-end mortgage loans is permitted but not required for the

calendar year of the acquisition. Comment 3(d)-3.ii.

118 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

If a Financial Institution that is eligible for the partial exemption for closed-end mortgage loans

merges with a Financial Institution that is not eligible for the partial exemption and the

surviving or newly formed Financial Institution is not eligible for the partial exemption, for the

calendar year of the merger, collection of optional data for closed-end mortgage loans is

required for covered loans and applications handled in the offices of the merged Financial

Institution that was previously not eligible for the partial exemption. For the calendar year of

the merger, collection of optional data for closed-end mortgage loans is permitted but not

required for covered loans and applications handled in the offices of the merged Financial

Institution that was previously eligible for the partial exemption. Comment 3(d)-3.iii.

If a Financial Institution that is not eligible for the partial exemption for closed-end mortgage

loans acquires a branch office of a Financial Institution that is eligible for the partial exemption,

for the calendar year of the acquisition, collection of optional data for closed-end mortgage loans

is permitted but not required for covered loans and applications handled by the acquired branch

office. Comment 3(d)-3.iii.

If a Financial Institution that is eligible for the partial exemption for closed-end mortgage loans

merges with a Financial Institution that is not eligible for the partial exemption and the

surviving or newly formed Financial Institution is eligible for the partial exemption, for the

calendar year of the merger, collection of optional data for closed-end mortgage loans is

required for covered loans and applications handled in the offices prior to the merger of the

Financial Institution that was previously not eligible for the partial exemption. After the

merger, collection of optional data for closed-end mortgage loans is permitted but not required

for covered loans and applications handled in the offices of the institution that was previously

not eligible for the partial exemption. If a Financial Institution remains eligible for the partial

exemption for closed-end mortgage loans after acquiring a branch or office of a Financial

Institution that is not eligible for the partial exemption, collection of optional data for closed-

end mortgage loans is required for transactions of the acquired branch office that took place

prior to the acquisition. Collection of optional data for closed-end mortgage loans by the

acquired branch office is permitted but not required for transactions taking place in the

remainder of the calendar year after the acquisition. Comment 3(d)-

3.iv.

119 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

9. Practical implementation

and compliance

considerations

This section of the guide sets forth some general compliance and practical implementation

considerations related to the HMDA Rule. However, it is not a compliance plan and does not

include every compliance or implementation issue that an institution may need to consider.

Each institution will need to determine its obligations under the HMDA Rule and the best way

for the institution to comply with them. Depending on the institution, compliance could involve

preparing or changing policies, procedures, and processes. It could also result in changes to the

institution’s operations and its relationships with third parties, such as vendors. It could involve

additional staffing and training.

Institutions should consult with their legal counsel and compliance officers to understand their

obligations under the HMDA Rule and to prepare and implement compliance plans.

9.1 Identifying affected institutions,

products, departments, and staff

When planning, institutions should first determine if they are likely to be subject to the HMDA

Rule and, if so, identify their affected products, departments, and staff. The effects on these

products, departments, and staff may vary greatly depending on the institution’s size,

organizational structure, and the complexity of its operations and systems.

First, an institution should assess whether or not it will be a Financial Institution subject to the

HMDA Rule. This assessment can be done by reviewing the HMDA Rule’s effective dates and

criteria for institutional coverage. The loan-volume threshold criterion for Closed-End

Mortgage Loans changes from 25 to 100 Closed-End Mortgage Loans effective July 1, 2020, and

the loan-volume threshold criterion f0r Open-End Lines of Credit changes from 500 to 200

Open-End Lines of Credit effective January 1, 2022. A bank, savings association, credit union,

120 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

or nondepository institution should review the 2018 changes as well as the loan-volume

thresholds’effective dates. Financial Institutions that are not insured depository institutions or

insured credit unions are not eligible for either of the partial exemptions. For more information

on which institutions are subject to the HMDA Rule, see Section 3 of this guide. An institution

can also use the HMDA Institutional Coverage Charts

to help it determine if it is subject to

Regulation C, as amended by the HMDA Rule. However, the HMDA Institutional Coverage

Charts and this guide are not substitutes for the HMDA Rule. For more information on the

partial exemptions, see Section 4.3.

Second, a Financial Institution must assess which of its products and services involve Covered

Loans and reportable activity under the HMDA Rule. For more information on which

transactions relate to Covered Loans and reportable activity, see Section 4 of this guide.

It is important to note that the HMDA Rule may not require a Financial Institution to report

Open-End Lines of Credit. Initially, a Financial Institution is not required to collect or report

information about Open-End Lines of Credit if it originated fewer than 500 Open-End Lines of

Credit in either of the preceding two calendar years. Effective January 1, 2022, a Financial

Institution is not required to collect or report information about Open-End Lines of Credit if it

originated fewer than 200 Open-End Lines of Credit in either of the preceding two calendar

years. For more information on Open-End Lines of Credit, Covered Loans, and Excluded

Transactions, see Section 4.1 of this guide.

After determining which of its products and services involve transactions that must be reported,

a Financial Institution can begin to assess which of its departments, systems, and staff will be

affected.

Third, the Financial Institution should determine what information it must report and how it

will collect this information. The information that a Financial Institution must report might

vary depending on the type of transaction being reported. For example, a Financial Institution

may not be required to collect and report the same information for a purchased Covered Loan as

for an originated Covered Loan. It might not be required to report the same information for a

business-purpose loan as for a consumer-purpose loan. Additionally, effective May 24, 2018,

the HMDA Rule does not require certain insured depository institutions and insured credit

unions to collect, record, or report certain data points if a partial exemption applies to a

transaction. For more information on the partial exemptions, see Section 4.3.

121 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

It is important to note that certain financial institutions may no longer be subject to HMDA’s

closed-end requirements as of July 1, 2020, because they originated fewer than 100 closed-end

mortgage loans during 2018 or 2019, and may therefore stop collecting, recording, and

reporting HMDA data as of July 1, 2020. These financial institutions are not required to report

HMDA data collected in 2020 on closed-end mortgage loans (including closed-end data

collected in 2020 before July 1).

For more information on the recording HMDA data, see

Section 6.1.

After determining what information must be collected and reported for reportable transactions,

a Financial Institution can refine its assessment regarding which of its systems, departments,

and staff will be affected by the HMDA Rule.

9.1.1 Identifying changes to business processes, policies,

and systems

The requirements of the HMDA Rule may affect a number of a Financial Institution’s business

systems, processes, and policies. A review should be conducted of existing business processes,

policies, and systems that the Financial Institution, its agents, and other business partners use.

Identifying impacts early will allow the Financial Institution to understand what changes will be

needed to support ongoing compliance.

When reviewing its existing processes, policies, and systems, a Financial Institution should

consider the HMDA Rule’s requirement to submit data electronically beginning in 2018.

Beginning in 2018, Financial Institutions will not be able to use paper-based submissions for

HMDA data. The Bureau has created a web-based tool for submission of HMDA data. Financial

Institutions should become familiar with the new web-based submission tool and be able to use

it to submit data beginning in 2018. For more information on the web-based submission tool,

see http://www.consumerfinance.gov/hmda/

Note, though, that other laws or regulations may require collection of certain data on home

loan activity. For example, Regulation B includes an independent requirement to collect

information regarding the applicant’s ethnicity, race, sex, marital status, and age where the

credit sought is primarily for the purchase or refinancing of a dwelling that is or will be the

applicant’s principal residence and will secure the credit.

122 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Financial Institutions may need to revise or develop processes and policies to comply with the

changes to transactional coverage. For example, a Financial Institution may need to develop

new processes and policies to comply with the reporting requirements for Open-End Lines of

Credit.

9.1.2 Identifying impacts to key service providers or

business partners

Financial Institutions should review their arrangements and agreements with third parties

engaged for services related to mortgage or other support activities. Close coordination and

discussion of implementation plans with these vendors and business partners is critical to

ensure that the services for which they are engaged will continue to support the Financial

Institution’s business needs and comply with all regulatory and legal obligations.

Third-party relationships may need to be reviewed and adjusted to satisfy requirements for

collecting, recording, or reporting required HMDA data, updating compliance and quality

control systems and processes, and ensuring record management requirements are in place. If

the Financial Institution seeks the assistance of vendors or business partners, it is responsible

for understanding the extent of the assistance that they provide. Also, the data collection and

reporting requirements in the HMDA Rule reinforce the need to assess current integrations

between the Financial Institution’s technology platforms and those of its third-party providers

to determine what updates are necessary.

Software providers, other vendors, and business partners may offer compliance solutions that

can assist with any necessary changes. Identifying these key partners will depend on the

Financial Institution’s business model. For example, Financial Institutions may find it helpful

to coordinate and discuss potential implementation issues with their correspondents, secondary

market partners, and technology vendors. In some cases, institutions may need to negotiate

revised or new contracts with these parties, or seek a different set of services.

The Bureau expects supervised banks and nonbanks to have an effective process for managing

the risks of service provider relationships. For more information, see CFPB Bulletin 2012-03 at

http://files.consumerfinance.gov/f/201204_cfpb_bulletin_service-providers.pdf

123 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

9.2 Implementation and compliance

management support activities

9.2.1 Implementation and compliance management

Financial Institutions should develop implementation plans and follow change management

procedures to implement the requirements of the HMDA Rule based on an assessment of

impacts. The plans should be developed in consultation with, or reviewed by, key stakeholders

such as legal, compliance, and information technology departments. Implementation plans

should be proactively and clearly communicated to the Board of Directors and senior

management.

Policies, procedures, and process maps may need to be updated to reflect the changes made to

business processes in response to the requirements of the HMDA Rule. In addition, Financial

Institutions’ compliance management systems and other risk management supporting activities

may need to be adjusted to reflect the requirements of the HMDA Rule.

The HMDA Rule changes the way that HMDA data will be disclosed. These changes will require

Financial Institutions to provide new notices and post revised notices. They may also affect

policies and procedures. A Financial Institution may, but is not required to, use the model

notices in Attachment C

. For more information on disclosure requirements, see Section 6.3 of

this guide.

The HMDA Rule’s changes regarding the collection and reporting of an applicant’s ethnicity,

race, and sex will require that Financial Institutions revise their collection forms or Application

forms. For more information on collecting ethnicity, race, and sex information, see Section 5.1

of this guide and appendix B to the HMDA Rule.

When implementing its compliance plan, a Financial Institution should note that many of the

HMDA Rule’s effective dates are applicable based on when a Financial Institution takes final

action, not when it received an Application.

9.2.2 HMDA responsibilities

A Financial Institution’s management should ensure that procedures and systems exist to collect

and maintain accurate data for each Covered Loan and Application that the Financial Institution

124 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

is responsible for reporting. The individual(s) assigned responsibility for preparing and

maintaining the data should understand the regulatory requirements and be provided the

resources and tools needed to produce complete and accurate data. Appropriate record entries

for a Covered Loan or Application must be made on a LAR within 30 calendar days after the end

of the calendar quarter in which the final action occurs (such as origination or purchase of a

Covered Loan, or denial or withdrawal of an Application). The data must be submitted on time,

and the institution should respond promptly to any questions that may arise during the

processing of data submitted. An authorized representative of the Financial Institution with

knowledge of the data submitted must certify the accuracy and completeness of the annual data

submitted.

9.2.3 Staffing and training

To ensure that it can meet its obligations under the HMDA Rule, a Financial Institution should

evaluate current staffing levels and relevancy and adequacy of training provided to employees.

These employees likely include operations and lending-related staff such as loan officers,

processors, compliance, and quality-control staff, as well as others who approve, process, or

monitor mortgage loans. Training may also be required for other individuals that the Financial

Institution, its agents, or its business partners employ.

Execution of tasks related to the preparation of reports or records are likely performed by

compliance personnel of Financial Institutions. For some Financial Institutions, however, the

data intake and transcribing stage could involve loan officers or processors whose primary

function is to evaluate or process Applications. For example, loan officers may obtain

information from applicants and input that information into the reporting system.

125 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

ATTACHMENT A:

126 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

ATTACHMENT B:

Action taken chart

Scenarios

Reportable

Action Taken

Reportable Date

Financial Institution made a credit decision

approving an Application, including a preapproval

request, before loan closing or account opening and

that credit decision resulted in a Covered Loan being

originated. Comments 4(a)(8)(i)-1.

Financial Institution made counteroffer and applicant

accepted resulting in a Covered Loan being

originated. Comments 4(a)(8)(i)-9 and 4(a)(8)(ii)-5.

Loan

originated

Generally, loan closing or

account opening date. If

applicable, can be: later

date of initial funds

disbursement; date

Financial Institution

acquired Covered Loan

f rom the party that initially

received the Application;

or, f or a construction-to-

permanent loan, date

Covered Loan converts to

permanent financing

Financial Institution purchased a Covered Loan after

closing or account opening, and Financial Institution

did not make a credit decision on the Application

prior to closing or account opening. Comments

4(a)(8)(i)-2 and 4(a)(8)(ii)-6.

Financial Institution made a credit decision on an

Application prior to closing or account opening, but

repurchased the Covered Loan from another entity

to which the Financial Institution had sold it.

Comments 4(a)(8)(i)-2 and 4(a)(8)(ii)-6.

Loan

purchased

Date of purchase

127 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

23 Customary commitment or closing conditions include: a clear-title requirement, an acceptable property survey, acceptable title insurance binder,

clear termite inspection, a subordina tion agreement from a nother lienholder, and, where the applicant plans to use the proceeds from the sale of one

home to purchase another, a settlement statement showing adequate proceeds from the sale. Comment 4(a)(8)(i)-13.ii.

24 Underwriting or creditworthiness conditions include: conditions that constitute a counter-offer, (such as a demand for a higher down-payment),

satisfactory debt-to-income or loan-to-v alue ratios, a determination of need for private mortgage insurance, a satisfactory appra isal requirement, or

verification or confirmation, in whatever form the Financial Institution requires, that the applicant meets underwriting conditions concerning

applicant creditworthiness, including documentation or verification of income or assets. Comment 4(a)(8)(i)-13.iii.

Financial Institution made a credit decision

approving an Application before loan closing or

account opening, all conditions were satisfied,

Financial Institution agreed to extend credit, but a

Covered Loan was not originated. Comments

4(a)(8)(i)-3, 4(a)(8)(i)-13, and 4(a)(8)(ii)-4.

Financial Institution made a credit decision

approving an Application subject to conditions that

are solely customary commitment or closing

conditions,

and the conditions were not all met.

Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-4.

Financial Institution made a credit decision

approving an Application, subject solely to

outstanding conditions that are customary

commitment or closing conditions, but applicant

f ailed to respond or a Covered Loan was not

originated. Comments 4(a)(8)(i)-3 and 4(a)(8)(ii)-4.

Financial Institution made a credit decision

approving an Application, all underwriting and

creditworthiness conditions

were met, outstanding

conditions were solely customary commitment or

closing conditions, and applicant expressly withdrew

bef ore a Covered Loan was originated. Comments

4(a)(8)(i)-13 and 4(a)(8)(ii)-4.

Covered Loan was originated, but Borrower

rescinded after closing and before Financial

Institution was required to submit its LAR containing

information for the Covered Loan. Comments

4(a)(8)(i)-10 and 4(a)(8)(ii)-4.

Application

approved but

not accepted

Any reasonable date, such

as approval date, deadline

f or accepting offer, or date

f ile was closed

128 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Financial Institution denied an Application before

applicant withdrew it and before file was closed for

incompleteness. Comments 4(a)(8)(i)-4 and

4(a)(8)(ii)-2.

Financial Institution provided conditional approval

specifying underwriting or creditworthiness

conditions that were not all met. Comments

4(a)(8)(i)-13 and 4(a)(8)(ii)-2.

Application

denied

Date Application is denied

or date notice sent to

applicant

Financial Institution made a counteroffer to lend on

different terms than applicant’s initial request, and

applicant did not accept the counteroffer, declined to

proceed, or failed to respond. Comments 4(a)(8)(i)-

9 and 4(a)(8)(ii)-2.

Application

denied (based

on the original

terms requested

by applicant)

Date Application is denied

or date notice sent to

applicant

Financial Institution made counteroffer to lend on

terms different than applicant’s initial request,

applicant agreed to proceed with terms of

counteroffer, then Financial Institution conditionally

approves application subject to underwriting or

creditworthiness conditions, and applicant expressly

withdraws before satisfying all underwriting and

creditworthiness conditions and before the Financial

Institution denies the Application or closes the file for

incompleteness. Comment 4(a)(8)(i)-9.

Application

withdrawn

Date the express

withdrawal was received or

date shown on the

notification form (if written

withdrawal)

129 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Application expressly withdrawn by applicant before

Financial Institution made a credit decision denying

or approving the Application and before file was

closed for incompleteness. Comments 4(a)(8)(i)-5

and 4(a)(8)(ii)-3.

Financial Institution provided conditional approval

specifying underwriting or creditworthiness

conditions, and the Application was expressly

withdrawn by the applicant before the applicant

satisfied all specified underwriting or

creditworthiness conditions and before the Financial

Institution denied the loan or closed the file for

incompleteness. Comments 4(a)(8)(i)-5 and

4(a)(8)(ii)-3.

Application

withdrawn

Date the express

withdrawal was received or

date shown on the

notification form (if written

withdrawal)

Financial Institution approved an Application, subject

to underwriting or creditworthiness conditions, sent

notice of incompleteness under Regulation B, but

the applicant failed to respond within the specified

time. Comments 4(a)(8)(i)-13 and 4(a)(8)(ii)-2.

Applicant had not satisfied all underwriting or

creditworthiness conditions, Financial Institution sent

written notice of incompleteness under Regulation B,

and the applicant did not respond to the request for

additional information within the period of time

specified in the notice. Comments 4(a)(8)(i)-6 and

4(a)(8)(ii)-2.

File closed for

incompleteness

Note: A

preapproval

request that is

closed for

incompleteness

is not reportable

under HMDA

Date f ile was closed or

date notice sent to

applicant

Applicant had not satisfied all underwriting or

creditworthiness conditions, Financial Institution sent

written notice of incompleteness under Regulation B,

the applicant did not respond, then the Financial

Institution provided notice of adverse action on basis

of incompleteness under Regulation B. Comments

4(a)(8)(i)-6 and 4(a)(8)(ii)-2.

Either file closed

f or

incompleteness

or application

denied

Note: A

preapproval

request that is

closed for

incompleteness

is not reportable

under HMDA

Date f ile was closed,

Application was denied (as

applicable), or notice sent

to applicant

130 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

Application was a request for a preapproval under a

Preapproval Program, the Financial Institution

approved the preapproval request, but the

Application did not result in the Financial Institution

originating a Covered Loan. Comments 4(a)(8)(i)-8

and 4(a)(8)(ii)-4.

Preapproval

request

approved but

not accepted

Any reasonable date, such

as approval date, deadline

f or accepting offer, or date

f ile was closed

Application was request for a preapproval under

Preapproval Program, and the Financial Institution

made a credit decision denying the preapproval

request. Comments 4(a)(8)(i)-7 and 4(a)(8)(ii)-2.

Preapproval

request denied

Date preapproval request

was denied or date notice

sent to applicant

131 HOME MORTGAGE DISCLOSURE (REGULATION C) VERSION 5.0

ATTACHMENT C:

Sample notices

Below is a sample notice that can be provided to members of the public upon

request to satisfy § 1003.5(b)(2) and (c). The following language is suggested, but

is not required.

Home Mortgage Disclosure Act Notice

The HMDA data about our residential mortgage lending are available online for review. The

data show geographic distribution of loans and applications; ethnicity, race, sex, age and income

of applicants and borrowers; and information about loan approvals and denials. These data are

available online at the Consumer Financial Protection Bureau’s Web site

(www.consumerfinance.gov/hmda). HMDA data for many other financial institutions are also

available at this Web site.

Below is a sample posted notice that can be used to satisfy § 1003.5(e) and inform

the public of availability of HMDA data. The following language is suggested, but is

not required.

Home Mortgage Disclosure Act Notice

The HMDA data about our residential mortgage lending are available online for review. The

data show geographic distribution of loans and applications; ethnicity, race, sex, age and income

of applicants and borrowers; and information about loan approvals and denials. HMDA data for

many other financial institutions are also available online. For more information, visit the

Consumer Financial Protection Bureau’s Web site (www.consumerfinance.gov/hmda).