We have a loan that was a cash-out refi on a free and clear property. Fannie Mae guidelines required them to TRANSFER property ownership from their LLC to them personally. Is this considered a Loan Purpose of 1-Purchase (themselves personally from their LLC), or would it remain 4-Other?

New borrower - new owner - IMO purchase.

What would you say to another transaction that added themselves personally in addition to the pre-existing LLC? Purchase or Other as they added themselves individually as owners, not replacing the LLC?

You do not add an additional someone to title on a piece of property via a loan transaction.

What do you mean? I do realize that adding others within itself wasn't the cause of the transaction, but the Deed of Trust went from just having the LLC before the transaction to having both the LLC AND the 2 individuals behind the LLC on the Deed of Trust afterwards.

I just meant that unless you are doing a formal assumption of the loan and property by additional parties and with the original party still remaining part of the transaction, the addition of the additional parties would happen outside of the loan closing through a separate warranty deed. It is not a purchase if the original party still owns the property and depending on how you view it, it would not be a refinance, as it does not just involve the same borrower.

2(p) Refinancing
1. General. Section 1003.2(p) defines a refinancing as a closed-end mortgage loan or an open-end line of credit in which a new, dwelling-secured debt obligation satisfies and replaces an existing, dwelling-secured debt obligation by the same borrower.

Okay...so you are saying if any of the original borrowers carry over to the new Deed of Trust, then even if someone is added, it is considered a refinance (4-Other if free and clear)? It would not be a multi-purposed loan (cash-out refi and purchase) where 1-Purchase would be reported. Correct?

No - that is not what I am saying. Since the original owner is still on the property, I do not think you can call it a purchase. I am not sure you can call it a refinance either, since the new loan is not to "the same borrower". It is a very grey area, and the real question is why anyone would do this as it destroys the protection offered by establishing an LLC. I hope this is a hypothetical.

[i[if any of the original borrowers carry over to the new Deed of Trust, then even if someone is added, it is considered a refinance[/i]

For it to be considered a refinance at least one of the original borrowers would have to also carry over to new obligation (loan).