Jump to Content
ABA: The American Bankers Association
Skip Section Navigation

Does revised Regulation C apply to refinancings secured by dwellings used for (non-agricultural) business purposes?

Does revised Regulation C (implementing the Home Mortgage Disclosure Act) apply to refinancings secured by a dwelling that are used for business (non-agricultural) purposes?

Yes. Under §1003.3(c) of revised Regulation C, "covered loan" means a closed-end mortgage loan or open-end line of credit (secured by a dwelling) that is not an excluded transaction under §1003.3(c). Among the exclusions of §1003.3(c) are closed-end mortgage loans that "will be made primarily for a business or commercial purpose," unless the loan is a home improvement loan, a home purchase loan, or a refinancing. (§1003.(c)(10)). "Refinancing" under §1003.2(p) means a closed-end mortgage loan or an 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" (Emphasis added.) Thus, if the loan being replaced was secured by a dwelling (regardless of its purpose), the new dwelling-secured loan is reportable. A business purpose loan secured by a dwelling would not be reportable, for instance, if it is not a refinancing. (However, see previous question of the month regarding refinancing of dwellings/farmlands used for agricultural purposes, which are not reportable.) (January 2018)

Compliance Hotline

Have a compliance-related question? We're here to help. Members, reach us by phone or email.