True or False: If a property owner expects to occupy their rental property for more than 14 days a year, it is not considered non-owner-occupied.

True or False: If a property owner expects to occupy their rental property for more than 14 days a year, it is not considered non-owner-occupied.

• A. True
• B. False
• C. It depends on the loan type
• D. It depends on local regulations

Answer: (A)

The assertion that a property owner expecting to occupy their rental property for more than 14 days a year means it is not considered non-owner-occupied is accurate. In the context of mortgage lending and Regulation Z, a property is classified as non-owner-occupied if the owner uses it for income-generating purposes and does not reside there. The 14-day rule is a commonly recognized threshold that arises in tax law regarding rental properties, where properties rented out for fewer than 15 days a year may still allow the owner to avoid reporting rental income for tax purposes. Therefore, if an owner plans to stay in the property for more than 14 days, it suggests a level of personal use that contributes to the classification as an owner-occupied property rather than a strictly rental investment. This distinction is critical for determining the applicable loan terms, rates, and requirements, which often differ between owner-occupied and non-owner-occupied properties.

The assertion that a property owner expecting to occupy their rental property for more than 14 days a year means it is not considered non-owner-occupied is accurate. In the context of mortgage lending and Regulation Z, a property is classified as non-owner-occupied if the owner uses it for income-generating purposes and does not reside there. The 14-day rule is a commonly recognized threshold that arises in tax law regarding rental properties, where properties rented out for fewer than 15 days a year may still allow the owner to avoid reporting rental income for tax purposes. Therefore, if an owner plans to stay in the property for more than 14 days, it suggests a level of personal use that contributes to the classification as an owner-occupied property rather than a strictly rental investment. This distinction is critical for determining the applicable loan terms, rates, and requirements, which often differ between owner-occupied and non-owner-occupied properties.