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      Business purpose and non-owner occupancy provisions for Non-InvestorDocs loan packages

      GoDocs allows the inclusion of the Business purpose and non-owner occupancy provisions within ApartmentDocs and CommercialDocs.

      If it is a true multi-family property with 5+ units, then the property is legally presumed to be a commercial property and is not at risk of being deemed a residential property and, thus, does not require the same level of business purpose and/or non-owner occupied certifications. Likewise, if the loan is for 5+ SFRs that are held for commercial leasing purposes, but which could be used for a borrower's and/or guarantor's personal residence, then we recommend that this loan be treated as an InvestorDocs loan and have included the recommended business purpose and/or non-owner occupied certifications. You will find reference in Section O of the Note as per screenshot below:

      GoDocs continues to view the inclusion of the business purpose document and a non-owner occupancy document in ApartmentDocs and CommercialDocs as not necessary but allows the inclusion as a courtesy to each Lender's business decisions. These two documents will be included in the non-InvestorDocs loan order when the feature is activated and selected per-order.

      These documents are stand-alone documents for ApartmentDocs and CommercialDocs and can be used or discarded at your discretion, as applicable. Similar documents in the InvestorDocs product are triggered based on the data entry of the loan order and are not intended to be included or omitted as freely in such packages.

      Please contact the Customer Support Team for assistance in activating or deactivating this feature.

      Laws and disclosures that apply to Business Purpose loans:

      While certain federal laws such as the Equal Credit Opportunity Act and the Federal Housing Act are applicable to both residential and commercial loans, of significant importance is which federal laws are not applicable to commercial business purpose loans.

      Specifically, business purpose loans are exempt from Regulation Z (which implements the Federal Truth in Lending Act "TILA"). In addition, business purpose loans are exempt from Regulation X (which implements the Real Estate Settlement Procedures Act "RESPA").  To ensure the loan is considered commercial (business purpose) we also include language that the loan will be used solely for business, commercial investment, or similar purposes, and that no portion of it will be used for agricultural, personal, family, or household purposes.  Lastly, we include a Business Purpose of Loan Certification.

      Of importance, you are exempt from Residential laws and fall under commercial lending laws as long as the proper language and disclosure are included in the loan documents, as outlined above.