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An LLC is buying a residence to be occupied by the two members of the LLC. The members will sign the promissory note in their individual capacities and not as representatives of the LLC. Why does the bank say the Closing Disclosure is required for this purchase by an entity?


TRID rules apply to the loan given to the borrower; not the purchase by the buyer. If the LLC was obtaining the loan the transaction would qualify for the exemption provided for “extensions of credit to other than a natural person.” If the LLC was buying the residence for rental purposes it would likely qualify for the other § 1026.3(a) exemption for “an extension of credit primarily for a business, commercial or agricultural purpose.”

Remember also that there is no prohibition on using the Closing Disclosure for exempt transactions. Ultimately it is the lender who makes the decision as to forms usage.