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#2282264 - 03/15/23 03:25 PM Owner Occupied or Non Owner Occupied
terpsfan Offline
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Would an event center be considered non-owner-occupied since space is rented?

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Lending Compliance
#2282266 - 03/15/23 03:31 PM Re: Owner Occupied or Non Owner Occupied terpsfan
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Non-owner-occupied in what context?
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#2282268 - 03/15/23 03:55 PM Re: Owner Occupied or Non Owner Occupied terpsfan
terpsfan Offline
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Call report and CRE purposes

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#2282270 - 03/15/23 04:18 PM Re: Owner Occupied or Non Owner Occupied terpsfan
rlcarey Online
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rlcarey
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Galveston, TX
It is based on occupancy and repayment source.

Loans secured by owner-occupied nonfarm nonresidential properties” are those nonfarm nonresidential property loans for which the primary source of repayment is the cash flow from the ongoing operations and activities conducted by the party, or an affiliate of the party, who owns the property. Thus, for loans secured by owner-occupied nonfarm nonresidential properties, the primary source of repayment is not derived from third party, nonaffiliated, rental income associated with the property (i.e., any such rental income is less than 50 percent of the source of repayment) or the proceeds of the sale, refinancing, or permanent financing of the property. Include loans secured by hospitals, golf courses, recreational facilities, and car washes unless the property is owned by an investor who leases the property to the operator who, in turn, is not related to or affiliated with the investor (in which case, the loan should be reported in Schedule RC-C, Part I, item 1.e.(2), below). Also include loans secured by churches unless the property is owned by an investor who leases the property to the congregation (in which case, the loan should be reported in Schedule RC-C, Part I, item 1.e.(2), below).
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#2282293 - 03/16/23 12:13 PM Re: Owner Occupied or Non Owner Occupied terpsfan
terpsfan Offline
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The event center is operated by the owner but the repayment is from the event space rental. I was not sure if this type of rental would be considered rental income under this definition.

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#2282296 - 03/16/23 01:00 PM Re: Owner Occupied or Non Owner Occupied terpsfan
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
If ABC, Inc. owns an event center and does not have on-going operations at the center and just rents the center out and payment of the loan is based on rental income, it would be like you owning a rental property. In either case, I am not sure how you call that owner-occupied.
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