Scenario 1: Borrower's personal investment property, or a second home is used to secure a HELOC, funds are consumer-purpose... HELOC periodic statement rules 226.7 apply.

Scenario 2: Borrower's RENTAL property is used to secure a credit line, funds are consumer-purpose. Would this be considered a HELOC since funds are consumer-purpose although it's secured by a business property? Could you say it's a commercial line of credit even though proceeds are consumer-purpose?

Scenario 3: Borrower's 2nd home is used to secure a business-purpose LOC. Is this a HELOC?

Confused. Do reg Z home equity requirements apply?

Any consumer purpose open-end credit secured by the consumer's dwelling will fall under the HELOC rules. See the Commentary to 226.5b(1).

If the loan is an open-end credit for a consumer purpose then it will be subject to applicable rules found in Subpart B of Reg. Z for the specific credit (home secured or non home secured).

Your scenario #3 would not be subject to Reg Z because it is for a business purpose.

Thanks, Dan! Was trying to wrap my head around whether the type of property could affect the requirments, even with proceeds for personal use.