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#2254825 - 06/03/21 09:26 PM Refinance - Consumer rents out 51% of SFR
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,160
California
We have a borrower refinancing a mortgage loan - she is 100% owner of the SFR and it is her primary residence. Since her income flows from a corporation that she owns 100%, the corporation will be a co-borrower. (Corporation has no ownership in the SFR.) The MLO claims that the individual rents out "51% of her home to a tenant" (still an SFR), therefore the MLO says it is a commercial loan (not a consumer loan) as he considers the SFR to be "investment property". (He thinks having the corporation as a co-borrower further strengthens the "commercial" status.) This feels like it could only be a consumer loan - I don't think the facts support a commercial deal nor would I consider this investment property. Am I off?

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#2254826 - 06/03/21 09:36 PM Re: Refinance - Consumer rents out 51% of SFR Tarhe
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 76,412
Galveston, TX
No - you are not wrong. It is owner occupied rental property if you believe all of that. The corporate co-borrower is meaningless if the corporation is 100% owned by the borrower as she already controls all corporate income and has nothing to do with the loan purpose.

If she needs a co-borrower, how is she meeting the ATR requirements. Any corporate income is already hers.

Sounds like some game playing.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2254828 - 06/03/21 09:48 PM Re: Refinance - Consumer rents out 51% of SFR Tarhe
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,160
California
Thank you!!

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