Options for Rental Property LLC Mortgage | Other LLC Mortgages
Looking for mortgage options for investment loans that allow a property to close in a LLC or corporation? There are rental property LLC mortgages, fix and flip loans, and new construction loans that allow the property to close in an LLC.
Fix and Flip Loans Allow Properties to Close In LLC or Corporation
One type of LLC mortgage financing that allows the property to close in LLC (Limited Liability Company) or corporation is the fix and flip program. Fix and flip loans are short term fixed interest only payment that are meant for borrowers looking to acquire property to rehab and sell or refinance of the line.
The fix and flip loan program does not require experience or income. The program includes fix and flip lines of credit and the single fix and flip program (no experience).
Rental Property LLC Mortgage Financing – LLC Loan for Investment Property
Another program that allows properties to close in LLC or corporation is the investment rental loan and Foreign Nationals (investment rental), which have 30 year fixed rates.
The LLC loan for investment property program is underwritten based on debt-service coverage rather than personal debt-to-income ratios. The property needs to cash flow a certain percent to qualify based on the dividing the mortgage payment PITIA (principal, interest, taxes, insurance, and home owners associations dues) to rent for LLC mortgage loans.
Required Documentation for LLC Mortgage Financing
A Loan Originator can put together a list of documents required for processing and underwriting. Here is a general list of documents required for the LLC or corporation:
Articles of Organization or Certificate of Formation
What are the Articles of Organization or Certificate of Formation?
The Articles of Origination or Certificate of Formation are documents that are organizing. Every state has a similar concept, but documents can differ by state.
- The state will provide either form when filing a LLC.
- These documents should provide an official state stamp and file number.
- The information typically contains information such as:
- Name of the LLC.
- Name and address of its members and/or managers.
- Name and address of the registered agent.
- Registered agents address.
- Info on if the LLC will be managed by members or selected members.
- Some states have additional information.
A company can be paid to form an LLC, but it is not as difficult.
Operation Agreement
What is an Operation Agreement?
An operating agreement of an LLC is a legal document that outlines the ownership and membership duties. This document must be a valid operating agreement of the LLC and signed by all members.
Form W-9 For the Borrowing Entity
Where can you find a W-9?
- A W-9 form can be found on the IRS’s website.
- Errors are common to make when filling on a W-9.
- When a borrower has a single-member LLC, the name of the sole member should be on line #1
- As well as the social security number or TIN (Taxpayer Identification Number)
- Under part I instead of the company’s EIN (Employer’s Identification Number)
Company Organizational Chart
What is the Company Organizational Chart?
The organizational chart is for a borrowing entity that should include the names of each member of the LLC.
- This will explain any organization ownership interest in the company.
- The organization chart should include the legal name of the LLC, EIN, and the address of the principal place of business.
Foreign Qualification Documents for the LLC
These are required when you have a property that is located in a different state than the company it is organized in.
What is a Foreign Qualification?
- This is often known as a Certificate of Registration or Certificate of Authority.
- This is the process of registering a cooperation or LLC.
- Allows the LLC or corporation to legally do business outside the state in which the company was formed.
