Opinion Letter No. 99-75
Contents of letter
April 9, 1975
Honorable Clarence H. Heflin
State Representative, 78th District
State Capitol Building, Room 304
Jefferson City, Missouri 65101
Dear Representative Heflin:
This letter is in response to your request for an opinion as to whether the provisions of Senate Bill No. 1 of the Second Extraordinary Session of the 77th General Assembly will prevent a loan to an individual or a group of individuals, the proceeds of which are to be used in a business or for the purpose of acquiring an interest in a business, from being secured by a first or second mortgage on residential real estate if the parties intend the loan to be a "business loan" under the bill.
Section 408.015 of the bill contains, the following definitions, inter alias:
"'Business 'loan' shall mean a loan to an individual or a group of individuals, the proceeds of which are to be used in a business or for the purpose of acquiring an interest in a business. The term shall also include a loan to a trust, estate, co-operative, association, or limited or general partnership.
"'Residential real estate loan' shall mean any real estate used or intended to be used as a residence by not more than four families.
"'Residential real estate loan' shall mean a loan made for the acquisition, construction, repair, or improvement of real estate used or intended to be used as a residence by not more than four families. The term shall also include any loan made to refinance such a loan. No loan secured by residential real estate shall be considered to be a business loan."
But for the last sentence in the definition of "residential real estate loan" contained in Section 408.015, a loan could satisfy the definition of a "business loan" as used in that section, even though it were secured by " residential real estate." However, the last sentence providing, "No loan secured by residential real estate shall be considered to be a business loan.", leaves no room for ambiguity as to its meaning. A loan secured by residential real estate otherwise falling within the definition of a "business loan" by virtue of the express language in Section 408.015 is not a business loan for the purposes of Senate Bill No. 1, Second Extraordinary Session, 77th General Assembly.
Very truly yours,
John C. Danforth
Attorney General