If Borrower is a home builder (or commercial entity) and He is hired to construct a 1-4 homestead dwelling, but, the LOT is in the name of the individual consumers... Is this considered a consumer purpose loan because the LOT is not in the borrower/builder name but is being pledged to the loan by the consumer who is having a home built?

On the surface it feels like the transaction is exempt from disclosures because it may be treated as business purpose since our borrower is the builder and the purpose of the loan is for him to construct the 1-4 dwelling he has been hired to construct, however, I'm questioning this because the LOT is not owned by the builder. It is in "his cutomer's name ".

Would this be consumer purpose since the consumer is pledging his lot where the homestead is being build (OR) is it commercial since the GRANTOR for the Lot is not our borrower?

If the borrower is an entity, the transaction is exempt from Regulation Z.

Not to mention that the loan purpose is not determined by the nature of the collateral.

Thank you both!