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4000 - Advisory Opinions

Title to Home and Loan Placed in Name of Executive Officer's Spouse But Guaranteed by Executive Officer is Considered "Home Residence" Loan for Purposes of New Limits on Extensions of Credit Under Section 306 of FDICIA


June 8, 1992

Pamela E.F. LeCren, Counsel

The following is in response to your request for written confirmation of our recent telephone conversation regarding the recent amendments to Part 337 of the FDIC's regulations with respect to loans to executive officers.

According to the information provided to this office, an executive officer of [Bank] is planning to construct a home to be used as his principal residence. For estate planning purposes, the title to the home and the construction/permanent loan will be in the officer's wife's name but the loan will be guaranteed by the executive officer.

You have asked this office to confirm that the above referenced loan would be considered a "home residence" loan and that as such it would not be subject to the maximum limit of $100,000 to which "other purpose" loans are subject.

Please be advised that assuming the loan is secured by a first lien and no other home residence loan is outstanding at the bank, we would consider the above loan to be a home residence loan even though title to the home will be in the name of the executive officer's wife.

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