Data on loans secured by residential property and loans secured by commercial property shall be reported in several FINREP templates (e.g. F13, F18.00, F18.01, F 18.02, F19, etc). 

According to Annex V, Part 2, paragraph 173 (a) of Regulation (EU) No 2021/451, the determination of whether immovable property collateral shall be residential or commercial shall be made in accordance with point (75) of Article 4(1) CRR;

CRR2 Article 4(1) point (75):

(75) ‘residential property’ means a residence which is occupied by the owner or the lessee of the residence, including the right to inhabit an apartment in housing cooperatives located in Sweden;

Based on the CRR2 definition residential properties (e.g. residential parks) being constructed by a real estate developer have been classified as „commercial immovable properties” as it is implied by Q&A 2015_2304.  Therefore loans granted to the real estate developers have been reported in „Non-financial corporations - Of which: Loans collateralised by commercial immovable property” (e.g. F 18.00 row 0140).

From 2025 Regulation 2024/1623 of the European Parliament and of the Council amending Regulation (EU) No 575/2013 (CRR3) has changed the definition of residential immovable property:

(75) “residential property” means any of the following:

(a) an immovable property which has the nature of a dwelling and satisfies all applicable laws and regulations enabling the property to be occupied for housing purposes;

(b) an immovable property which has the nature of a dwelling and is still under construction, provided that there is the expectation that the property will satisfy all applicable laws and regulations enabling the property to be occupied for housing purposes;

(c) the right to inhabit an apartment in housing cooperatives located in Sweden;

(d) land accessory to a property referred to in point (a), (b) or (c);

Based on the new definition in CRR3, it seems that the counterparty sector of the debtor (natural person or not) doesn’t matter, but only the purpose of the immovable property. Hence the new definition includes all properties under construction that are built for residential purposes, regardless of who built them (natural person or a real estate developer).Therefore the classification of residential properties being constructed by a real estate developer is not clear. 

Should these immovable properties be classified as „commercial or residential real estate” under CRR3?

Should the loans to real estate developers secured by these immovable properties under construction still be reported as „Loans collateralised by commercial immovable property” in FINREP?

On the other hand in our view it is clear that according to the definition of „commercial real estate (CRE)” in the ESRB Recommendation on closing real estate data gaps these loans still shall be classified and reported as CRE loans in FINREP where there is a reference to the ESRB Recommendation (e.g. in rows 0010, 0020 of F 18.02)