Farmhouse on Commercial Ag Property

Posted By: Norman Paperman

Farmhouse on Commercial Ag Property - 06/03/19 05:18 PM

Thoughts on this. I'm thinking there is no exemption here, but need some BOLers to authenticate my opinion.

Borrower is purchasing land to set up an agricultural operation. There happens to be an old farm-house on the property (for which, wait for it... the borrower says there is no use). I'm thinking that, while the farm-house might technically be a residential structure, the property and purpose overall is commercial, and thus, no exemption.

Am I crazy? Fire away.
Posted By: rlcarey

Re: Farmhouse on Commercial Ag Property - 06/03/19 06:08 PM

Exemption from what?? Escrows??

(ii) Exceptions. Paragraph (e)(1)(i) of this section does not apply if:

(A) The loan is an extension of credit primarily for business, commercial, or agricultural purposes;
Posted By: Norman Paperman

Re: Farmhouse on Commercial Ag Property - 06/03/19 07:17 PM

Wow! My mistake. Exemption from flood.
Posted By: rlcarey

Re: Farmhouse on Commercial Ag Property - 06/03/19 07:53 PM

No building is exempt from flood insurance regardless of its use or non-use.
Posted By: Norman Paperman

Re: Farmhouse on Commercial Ag Property - 06/03/19 07:59 PM

I figured as much. It would be exempt if it was a detached structure on a residential property, correct?

Thanks for the validation, Randy.
Posted By: Dan Persfull

Re: Farmhouse on Commercial Ag Property - 06/03/19 08:04 PM

It would be exempt if it was a detached structure on a residential property, correct?

You said it was a residential structure so no it would not be exempt if located on residential property.

If it was a non-residential detached structure and used for personal or family purposes then that structure would be exempt.
Posted By: rlcarey

Re: Farmhouse on Commercial Ag Property - 06/03/19 08:06 PM

Only if the detached building was being used for family, personal or household purposes and did not contain any living quarters.