Questions and Answers
I would like to know what disclosures must be given. I have a customer who is purchasing a second home in Wyoming. It will be a rental home 9 months of the year and a vacation home for the borrower for 3 months. Is this considered investment property?
No, at least not for purposes of Truth-in-Lending. The Commentary to Regulation Z says that credit to acquire, improve, or maintain rental property will be considered business-purpose credit if the owner does not occupy the rental property. Rental property is considered occupied by the owner if the owner expects to occupy the property for more than 14 days in the upcoming year. [Commentary, 12 CFR §226.3(a)-3] So the fact that this property will be rented is not enough to get the loan outside the scope of Truth-in-Lending. So you should provide the regular TILA/Regulation Z disclosures.
(Posted: 01/18/2008)
