HUD Amends RESPA's Business Purpose Exemption

It's official - at last! HUD has issued a revision to Regulation X to implement EGRPRA's mandate that the business purpose exemption in RESPA's Regulation X be the same as that in Regulation Z. You can notify your lenders that when an individual requests a loan to purchase a dwelling for business purposes, such as rental, the loan would be exempt from RESPA just as it is exempt from Truth in Lending. Lenders need now look only to the purpose of the loan, not the identity of the borrower as a corporation or individual, to determine whether the loan is exempt.

Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 1, 1/97