I am in confusion about what occupancy code to use when a loan is applied for and originated in the name of a business entity.
My loan is in the name of the business entity and secured by a single family dwelling.
I have found people saying to use Occupancy Code (2)non owner occupied, some saying to use code (3)not applicable and some saying I can even use code (1)owner occupied.
I have heard that the owner occupancy code does not relate to the borrower but to the owner of the property and how they occupy the dwelling? That since the entity is not a natural person it is NA?
Based on HMDA GIR page 12 it states:
Occupancy. For a one-to-four-family dwelling, including a manufactured home, indicate whether the property to which the loan or application relates will be the owner’s principal dwelling. For multifamily dwellings (housing five or more families), and for any dwellings located outside MSAs or in
MSAs where you do not have home or branch offices, you may enter either the code for “not applicable” or the
code for the occupancy status. For more inform ation, see Appendix A,I.A.6, and staff comment 203.4(a)(6)-1.
And the HMDA Glossary from the FFIEC defines Occupancy as:
Occupancy: Indicates whether the property to which the loan application relates will be the borrower's principal dwelling. For multifamily dwellings (housing five or more families), and any dwellings located outside MSA/MDs, or in MSA/MDs where an institution does not have home or branch offices, an institution may either enter the code for not applicable or the code for the actual occupancy status. For purchased loans, use code 1 (owner-occupied as a principal dwelling) unless the loan documents or application indicate that the property will not be owner-occupied as a principal residence. For second homes or vacation homes, as well as for rental properties, use code 2 (not owner-occupied as a principal dwelling). If a loan relates to multiple properties, the institution reports the owner-occupancy status of the property for which property location is being reported.
Am I interpretting the GIR guide correctly that NA would not apply in this situations since it is not a Multi-Family and my property is in an MSA of my main office.
And that the definiation does make be relate the occupancy back to the borrower of the loan, which is my business entity, and not just an owner of the dwelling? Since this is an entity it cannot occupy any dwelling.
Are all business enity loans to be a code (2) non-owner occupied??