Truth in Lending (Regulation Z) General Practice Test 2025 – All-in-One Guide to Exam Success!

The assertion that credit extended to maintain non-owner-occupied rental property is considered for business purposes is true. Under Regulation Z, which governs the Truth in Lending Act, credit extended for business-related activities is treated differently from consumer credit. This includes loans for properties that generate income, such as rental properties that are not occupied by the owner. These types of loans are seen as business transactions because the primary intent behind them is to earn a profit from rental income rather than to enhance personal living circumstances.

In the context of Regulation Z, a non-owner-occupied rental property is typically classified as an investment, and financing activities related to such properties fall under the definition of business purposes. This distinction is crucial, as it dictates different regulatory requirements and protections when it comes to disclosures, terms, and other aspects of the lending process. Therefore, the statement is accurate and reflects the proper understanding of how non-owner-occupied rental property financing fits within the framework of business purposes in lending.