That would be my understanding, yes. This home would not be considered a "dwelling." You wouldn't really have anything else to go off of other than the statement of purpose and discussions with the borrower. So, yes, you basically take their word for it. Individual vs. business wouldn't change anything here.
3. Exclusions. Recreational vehicles, including boats, campers, travel trailers, and park model recreational vehicles, are not considered dwellings for purposes of § 1003.2(f), regardless of whether they are used as residences. Houseboats, floating homes, and mobile homes constructed before June 15, 1976, are also excluded, regardless of whether they are used as residences. Also excluded are transitory residences such as hotels, hospitals, college dormitories, and recreational vehicle parks, and structures originally designed as dwellings but used exclusively for commercial purposes, such as homes converted to daycare facilities or professional offices.
It is basically being used like a hotel.