How is a loan for vacant land classified according to Regulation Z?

A loan for vacant land falls under the guidelines of Regulation Z based on the intended use of the property rather than a predefined classification. This means that such loans are not automatically classified as either personal-purpose or business-purpose.

The classification will depend on how the borrower intends to use the vacant land. For instance, if the intent is to build a personal residence, it may be treated as personal-purpose. Conversely, if the land is intended for commercial development or investment, it might be classified as business-purpose.

This flexibility in classification reflects the diverse reasons borrowers might have for acquiring vacant land, reinforcing that the purpose determines the categorization rather than the property type itself. As such, the correct understanding is that vacant land can be evaluated case-by-case regarding its use, aligning with the principles established in Regulation Z.