I have a loan that was used to purchase a fully commercial use property - no residences. The plan of the new owner is to convert the second floor space into 3 apartments while the first floor will remain commercial use.

I know at one point In one of the threads here, I had read it is the use of the property at the time it is purchased. I think the example used was that if someone is purchasing an old house not fit to live in, you aren't really buying a residence because no one can live in it.

But in another thread, someone else said reporting should be based on the intended use.

Help, please.

In this instance, I think you can rely on the mixed-use property guidance in Reg C which states you can use any reasonable means to determine whether the property is primarily business use or residential use. I would then opt for deciding the the property is primarily business use since the current use is entirely commercial and the proposed use is at least 50% commercial use.

Thank you, for the quick response.