Loan classifications are not black and white.

An LLC can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election.

If the property is in an area with a Market Classification 2, 3 or 4, or the appraisal indicates the property is in a declining market: The reason for the increase in values will only be allowed if significant improvements have been made or the borrower purchased the property under a distressed sale or non-arm's length/at-interest transaction and the above requirements have been met to substantiate the amount of value increase for the market.

Answer to your question: no, being an ******* is not a protected class. If

Now I am not an expert by any means so I may be very wrong with my classification.

Great asset class if there is demand for it in the specific market

This area is a little difficult to fit in to a classification.

you raise a good point, then should i call the mortgage people and change this property classification to an investment property?

what neighborhood classification would assign this area and what would you pay for a 4/2 two garage SFR, fully rehabbed with new roof, new HVAC, kitchen?..

I don't think classification is that hard.