Question & Answer

Question: If a customer applies for a business purpose loan to acquire a rental property, do we have to give the customer a copy of the appraisal?

Answer: You bet! The requirement in Regulation B (?202.5a) that the lender notify the customer of a right to receive a copy of the appraisal - or simply give the customer a copy - is determined by the nature of the property, not by the nature of the loan or the status of the customer. Thus, whenever the loan will be secured by a dwelling, you must provide a copy of the appraisal or the notice informing the customer of their right.

It is important to remember this distinction because this particular rule will affect commercial loans as well as consumer loans.

Copyright © 2000 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 17 & 18, 1/00