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Consumer or Commercial Purpose Loan

Question: 
I have a customer that is going to purchase a primary residence for himself but he is wanting to put the loan in his LLC's name. Because of this, I am stuck trying to determine if this loan would be Consumer (based on purpose to purchase primary residence) or Commercial (if it is allowable for a Consumer purpose loan to be put in an LLC name). If it can be processed as a Commercial loan, are there additional disclosures they need to sign?
Answer: 

by Dan Persfull:

Review 1026.3(a)(2) and its Commentary. A loan to a non-natural person is exempt from Reg. Z

Answer: 

by Randy Carey:

Dan is correct. The real question is whether the loan to the LLC for consumer purposes as there is no similar exemption in RESPA. If you determine that it is, then a GFE and HUD-1 would be required. It is a business decision as to how to treat these sorts of transactions.

First published on 05/05/2019

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