We have a business application to a contractor that builds homes. The loan will be secured by the home that is being built and will be a first lien. Is there any exemptions to the appraisal notice or sending a copy of an appraisal to the contractor? This loan is temporary.

Thank you!

1002.14—Rules on providing appraisals and other valuations.
(a) Providing appraisals and other valuations. (1) In general. A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling.

Regulation B is not a consumer regulation and there is no temporary financing exemption.

That is what I thought. I am being told since these loans were approved under a guidance line of credit and they are developer loans that this rule did not apply. So I wanted to double check.

1002.1

Official Interpretation
1(a) Authority and scope.
1. Scope. The Equal Credit Opportunity Act and Regulation B apply to all credit—commercial as well as personal—without regard to the nature or type of the credit or the creditor, except for an entity excluded from coverage of this part (but not the Act) by section 1029 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5519).

I was wondering if I could get clarification on the appraisal delivery requirements regarding a rental property being built. We have a commercial application from an individual for a construction loan to build an office and a residential VRBO on a lot. I know the loan being a 12 month construction loan or temporary financing (as defined in HMDA) doesn't matter, but does it matter that the residential structure will be a rental vacation home? I don't think it does because it is still a 1st lien on a residential dwelling and feel a copy of the appraisal should be provided. The commercial side is stating they disagree because it is not an individuals home. They feel because it is a transient dwelling, that the appraisal delivery rules don't apply.

Could you please confirm whether it matters if the residential dwelling being constructed is an individuals home or a rental home?

Any opinion would be greatly appreciated (especially if I am correct!).

Thank you!

My question would be: In what way is this rental home not a dwelling? Also, why are your commercial lenders arguing so hard against what is such a simple regulation to comply with?

Tried to edit, but I mean my questions would be to the commercial department, who is arguing against this.

I totally agree with you and told them they must provide a copy. I was just looking for confirmation in my thinking that the purpose of the residential dwelling does not matter. Started second guessing...............

Thank you for your reply.

I think I managed to make that edit for you, fmissle.

Thanks John!