There are loans known as Specialty loans. According to their name, they have special features. For example, consumer and business loans can have specialty loans. Consumer loans can be likened to residential mortgage loans in which the loan proceeds are primarily used for personal, family, or household purposes even though the collateral is owner or non-owner-occupied. Federal and State regulations task the lender with documentation and process involved in underwriting the loan to protect both the lenders and borrowers in consumer loan transactions.
Contrary to popular belief, there are rules and regulations for business purpose loans. For instance, Regulation B is the Equal Credit Opportunity Act (ECOA) valuations rule enacted on January 18, 2014. Business purpose loans cover all activities involving buying properties to fix & flip, fix & hold, repairs to rental properties, and many more. Some of the loans for the business are tagged Specialty loans. Examples include:
- Hospitality loans: These are loans often obtained by motels, hotels, and restaurants.
- Rural Property Loans: These are loans mostly used for securing large tracts of land in rural areas. They are mostly bought for farming, ranching, hunting, or fishing purposes.
- Residential Lot Development Loans: They are loans used to finance infrastructural developments such as streets, underground utilities, signage, entrances, and many more.
- Business Lot Development loans: These are loans used for the infrastructural development of places like business spaces, such as hotels, retail shopping centers, hospitals, motels, restaurants, and many more.
- Multifamily Loans: These are loans directed to finance or refinance apartments, townhomes or condominiums.
To know more about Specialty Loans, click here and read on.
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