Could anyone point me in a right direction?
If a borrower owns their home free and clear, but they are applying for a cash-out refinance to purchase a home for investment purpose, would this type of transaction be considered a "home equity". or “home purchase”? The borrower did not provide us with the physical address.

Are you secured only by the home owned free and clear? In that case, it would be a home equity loan for TRID.

Are you additionally secured by the investment home being purchased? In that case, it would be a home purchase loan for TRID.

TRID purpose is always tied to your collateral. If you have multiple pieces of collateral, then it is tied to any of the pieces. In other words, you start down the waterfall: purchase--if loan is to purchase any of the properties securing your loan, then it's a purchase for TRID. Refinance, construction, home equity...same thing.

Here's a cheat sheet to help.

Loan Purpose Summary for TRID


Purchase:

The loan’s purpose is to be reported as “Purchase” on the Loan Estimate and the Closing disclosure if any of the loan proceeds will be used to purchase the real property that will secure the loan.

Construction loans where a portion of the proceeds from the construction loan will be used to purchase the lot will be classified as a Purchase for TRID.


Refinance:

The loan’s purpose is to be reported as a refinance if any of the loan proceeds will be used to refinance an existing obligation to the same borrower secured by the property that will also secure the new loan even if we are not the current creditor.


Construction:

The loan’s purpose is to be reported as construction when the loan proceeds will be used for the initial construction of a dwelling on the property disclosed on the Loan Estimate.

If any of the loan proceeds will be used to purchase the property disclosed on the Loan Estimate the loan’s purpose will be classified as a Purchase for TRID.

If any of the loan proceeds will be used to pay off the property disclosed on the Loan Estimate the loan’s purpose will be classified as a Refinance for TRID.

The permanent financing to pay off a construction only loan, and secured by that property, will be classified as a Refinance for TRID.


Home Equity Loan:

All loan purposes that do not fall within the classification of a Purchase, Refinance or Construction will be classified as a Home Equity Loan for TRID.

Thank you all!