An individual is refinancing their personal property and using funds to purchase a commercial property. The applicant indicated during conversation with the lender that he will be quitting his job in the next year and will become self-employed, using the commercial space for his new business venture. There is a difference of opinion on whether to consider this in the underwriting decision. Reg B considerations? Thoughts? TIA..

(5) Income. A creditor shall not discount or exclude from consideration the income of an applicant or the spouse of an applicant because of a prohibited basis or because the income is derived from part-time employment or is an annuity, pension, or other retirement benefit; a creditor may consider the amount and probable continuance of any income in evaluating an applicant's creditworthiness. When an applicant relies on alimony, child support, or separate maintenance payments in applying for credit, the creditor shall consider such payments as income to the extent that they are likely to be consistently made.


It's a business decision but you have sufficient reason to believe the income stream currently being relied on will not be available within a year.