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.
Recommended For You
"While the rule creates specialized standards for financing the construction of single-family residential properties by excluding these MBLs from the aggregate construction and development limit and the borrower equity requirement under certain circumstances, it does not restrict the applicability of the construction and development requirements only to residential properties or real estate," Albin wrote
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
