ALEXANDRIA, Va. — A loan to construct a boat that will be used for commercial purposes is still subject to additional compliance requirements within NCUA's member business lending, the agency recently said.
At issue was a question of whether an MBL for the construction of a boat is subject to the additional requirements for construction and development loans. NCUA defines an MBL as a "construction and development loan if the financing arrangement involves acquiring property or rights to property, including land or structures, with the intent to convert it to income-producing property," NCUA Associate General Counsel Sheila Albin wrote in a Nov. 6 opinion letter.
Clarification was sought by Philadelphia attorney Gregory C. Hosmer on the applicability to boats because of the reference to "commercial or residential property" within the MBL rule.
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