We have a loan in which the borrower is purchasing a one-to-four family residential property to resale. He is not renting the property out, but is basically buying it as an investment to sell at a future date. He is not a real estate agent or otherwise normally dealing in real estate. Is this loan considered a business loan and thus exempted from RESPA? I know that rental units have some fun caveats to deal with, but this is the first time that a non-realtor has purchased a one-to-four family residential property for ultimate resale.

Buying a property for investment is a business purpose and a loan secured by improved property (non-commercial building) for business purpose is not covered by RESPA. But it's not exempt from HMDA and flood.

Reg. Z exempts the acquisition, maintenance or rehabilitation of non-owner occupied RENTAL property.

If I buy property for a personal investment, as in the case of the loan in question, then it is a consumer purpose loan and subject to all the required consumer disclosures, including RESPA.

Then maybe our compliance guide is incorrect. It's not a homestead purchase, not a second home purchase, not a rental property. The only category it fits in is "any loan secured by improved property (non-commercial building) for business purpose."

I can't speak to the validity of your compliance guide without seeing it. But the mentioned loan is a personal investment, not a business investment, therefore it is a consumer purpose loan subject to Reg. Z and RESPA.

RESPA exempts business purpose loans in accordance with 226.3(a)(1) and this loan does not meet that exemption.