I will be making a loan to an LLC which will be taking title to a residential property. The LLC members consist of 4 people. Two of the people will occupy the residence. The LLC will be the borrower and the owner of the property. Is this a loan that requires consumer disclosures or can it be classified as a Commercial Loan? I realize some of the recent changes could affect this situation. For example sake, I received the application and contract in August 2015 and closing will occur October 2015.

The LLC should be accounting for this asset it is purchasing in some manner as a business use. Will it receive rent, or classify this wonderful benefit of a free residence as a taxable benefit to the 2 people living in the residence?

According to the operating agreement they will be accounting for tenant leases.

I would treat as business purpose. A business purpose entity really cannot conduct a consumer purpose transaction. It has to charge rent or include as a taxable benefit because it providing a home as part of someones compensation, or some similar accounting treatment.

I agree that this would be considered a commercial transaction since an LLC is a business entity and it cannot conduct a consumer transaction.