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#1021204 - 08/15/08 04:49 PM Occupancy/Purpose
RFitzpatrick Offline
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RFitzpatrick
Joined: Apr 2002
Posts: 424
Pacific NW
Is occupancy tied to the purpose or the property securing the loan?

I have a customer taking out cash from their existing home (owned free and clear, nothing refi'd) to be used for the stated purpose of buying a rental property. If they hadn't stated it, it would be a personal use loan and we have no info or security on the rental to be purchased.

I understand I would report the location of the existing home securing the loan. But they are not purchasing it, so does the loan "relate" for occupancy to the the non-owner occupied rental? Otherwise the data would suggest that they are purchasing their primary residence, and that doesn't seem right.
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#1021221 - 08/15/08 05:05 PM Re: Occupancy/Purpose RFitzpatrick
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,951
Bloomington, IN
Occupancy status relates to the property you are reporting on the LAR.

If I use the equity in my primary residence to purchase a rental property you would report the loan as a purchase transaction and because you report the property securing the loan for home purchases you report my primary residence on the LAR and report it as owner occupied.
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#1021459 - 08/15/08 07:20 PM Re: Occupancy/Purpose Dan Persfull
RFitzpatrick Offline
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RFitzpatrick
Joined: Apr 2002
Posts: 424
Pacific NW
Thanks Dan,

I was thinking that was the case, but I was trying to get the non-owner-occupied in there somewhere since that was the original purpose.
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