HMDA & Vacation Rentals

We received so many great questions for our FREE Lending Compliance Q & A Forum on January 22^nd. We covered a lot of different topics and, if you missed it, don’t’ worry; you can still go back and listen to the recording at your convenience. Here’s some feedback from attendees:

• These Q&As are unmatched in comparison to others. Highly recommend these to others and LOVE how they are recorded so you can relisten in the event that you miss part of a question.
• This session was extremely helpful and answered some questions I hadn't even thought of, being relatively new to compliance.

Here’s a question we received that we get quite often:

If someone purchases a home to be used primarily as a Vrbo rental but the owner might stay in it occasionally as well, would this be mostly transitory and not HMDA-reportable or, since the owners might vacation there, is it reportable as a second home or vacation home?

HMDA doesn’t provide any guidance specific to vacation rentals such as Vrbo, Airbnb, Vacasa, etc. Once you know that funds will be used to purchase a vacation rental, the next step is determining whether the credit will be secured by a HMDA-defined dwelling. Remember, HMDA has its own definition of a dwelling and there are a lot of exclusions. One of those being …transitory residences such as hotels, hospitals, college dormitories…. So, what does transitory mean? Here again, there is no definition, only the few examples provided.

Here’s what Jerod had to say:

We also covered this topic in much more detail in our January Issue of our magazine, Banking on BCC,so be sure to check it out!