Last year, we made a construction loan to a consumer to build his single family residence. As an abundance of caution, we also took a T/D on the home he currently lives in. The loan was disclosable and a right of rescission was given. The purpose of the loan has now changed to a "spec" home as the consumer plans to complete construction and sell the property. Is the loan now considered "non-disclosable"? We are doing an increase/renewal. Would a rescission no longer be required as the purpose has changed? Thank you!

Is the "consumer" a contractor that as course of their livelihood builds and sells spec homes? If not then I would argue this is a personal investment therefore a consumer purpose loan subject to all applicable consumer disclosures.

I agree with Dan, if not a builder, we would consider this a personal investment. I use the term "investment" lightly these days.

Thank you!