A commercial lender wants to do a loan where the purpose of the loan will be to refinance 125 acres of farmland, barn, other improvements AND to construct a Single Family Residence. The farmland and barn will continue to be owned by the LLC and the new SFR will also be owned by the LLC.
1. The land and barn will be used for agricultural purposes
2. A portion of the SFR will be used for rental purposes. An S-corporation with common ownership with the LLC will be paying rent to the LLC for office space and insurance, etc.
3. The house will also be the residence of the owners of the LLC.
First thought was not subject to TILA and RESPA. After a restless night I am now second guessing my decision since it appears the purpose behind refinancing the farm loan would be to get additional money to build the house the owners will live in. Also,Doe LLC is run by Jon and Jane Doe (who will occupy the SFR).
I still think it is business purpose and I am most likely overthinking this but I would appreciate some other opinions.