Appraisal Rule and Zoning

Would appreciate any thoughts on this Reg B appraisal rule question.

The rule provides: A creditor shall provide an applicant a copy of all appraisals and other written valuations developed in connection with an application for credit that is to be secured by a first lien on a dwelling.


The term "dwelling" means a residential structure that contains one to four units whether or not that structure is attached to real property. The term includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.

So if we have a commercial loan that will be secured by a residential 1-4 property (it is a single-family house used for a business office) that is zoned commercial, do the appraisal rules come into play?

Is the house USED as a dwelling or not? If the whole building is converted for use as a business then it sounds like this is not a consumer mortgage loan.

Truffle it is the businesses office. Reg B appraisal rules apply whether it is consumer or commercial loan right?

But it's not a 'dwelling'.

Some regulations kick in because of loan purpose
Some because of collateral
Some by type of borrower.

There is not one regulation which addresses which regs are in effect for loans originated in the residential, consumer, commercial, or whatever loan department. That is a bank choice! What matters per the regulation are the above 3.

The bank can have a consumer PURPOSE loan in the commercial department, and it is still a consumer purpose loan with all the disclosures and nuances. Vice versa.

If the building is used for commercial purposes, it isn't a residential dwelling, and therefore, the appraisal delivery requirement won't apply. Zoning doesn't really play a part, just the borrower's use of the building.

To add to this. A building for business but also has living quarters and is the owners primary residence. This would be HMDA and also appraisal rules would apply?