Regulation B - Appraisal Notice Disclosure

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Question:

If we have a 1-4 dwelling that is being used for a commercial purpose (day care, real estate office, doctor or dentist office etc.) and our lien will be in first position, since the loan is a commercial loan do we still need to send the upfront appraisal notice? If the property is zoned commercial or granted a zoning exception does that matter?

Answer:

The type of loan - commercial or consumer - does not matter. It is all whether the collateral is a dwelling as defined in Regulation B. If it is no longer a residential structure, then the appraisal requirement will not apply.

(2) Dwelling. The term "dwelling" means a residential structure that contains one to four units whether or not that structure is attached to real property. The term includes, but is not limited to, an individual condominium or cooperative unit, and a mobile or other manufactured home.