Posted over 2 years ago

List of Non-Recourse Lenders for Self-Directed IRA and 401k

The unlimited investment capability of the self-directed IRA or Solo 401k allow account funds to be invested into non-traditional assets, such as real estate. Account owners who choose to purchase real estate can leverage the purchase with a non-recourse loan. A conventional recourse loan cannot be used with an IRA or 401k to make investments; it would be considered a prohibited transaction.

Over the years we established a relationship with several lenders offering such loans and hope this will serve as a resource for you. We are not affiliated with any of the lenders below and you should contact each lender directly to inquire about the details of the financing programs they offer. Please note that all the terms and other details below are subject to change at any time.

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Non-recourse lenders

North American Savings Bank provide loans in all 50 states. Founded in 1927, NASB now manages over one billion dollars in assets.

NASB offers a IRA lending program to help individual investors with their financing needs within IRA and 401k accounts. NASB lends up to 70% loan-to-cost on single family detached homes and 60% on all other residential properties (CA, AZ, FL, MI, OH, NV have a max 55% loan-to-cost). The loan amount is determined by the property condition, cash flow, recent property history, and retirement reserves in the accounts. Loan decision can be obtained typically within 24 hours. Processing time is about 45 days from application date. NASB offers a 5 year ARM and a 25 year fixed.

Minimum requirements for a non-recourse loan:

  • Minimum down payment is 30% of the purchase price. Insufficient cash flow or the condition of the property may require a larger down payment.
  • The property must generate sufficient Net Operating Income (rents minus operating expenses) to exceed the debt payments by 20–25%.

[email protected] | www.iralending.com

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MyIRALender

First Western Federal Savings Bank is a nationwide non-recourse lender that helps their clients use their self directed retirement accounts to purchase real estate investment with leverage. They finance residential, commercial, and multifamily properties in all 50 states for Buy and Hold investors.

First Western Federal Savings Bank offers 25-year, fully amortizing loans with no pre-payment penalty and no balloon payments. The maximum LTV is up to 60% for 1-4 unit residential properties and 50% for larger rental and commercial properties. The loan amount can range from $40,000 to $800,000. Typically, loan decisions are made within 2 days, and processing time is usually 30 to 35 days from the application date.

Minimum requirements for non-recourse loan:

  • Minimum liquid reserves in the retirement account: 15% of the loan amount
  • Net operating income exceeds debt payments by a minimum of 25%

For more information, please contact:

[email protected] | www.myiralender.com

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FirstBank

Marshall Reddick Real Estate has been a prominent nationwide residential real estate firm since 1979. They provide Non-recourse lending options to individuals and self-directed retirement accounts for both buy-and-hold and fix-and-flip transactions. They can lend nationwide and they offer fixed interest rate loans at very competitive rates.

Marshall Reddick Real Estate offers long-term as well as short-term financing options for non-owner occupied residential real estate. There are 3 different loan options for long-term financing which are all fixed-interest rate loans. They are one of the only non-recourse lenders in the country that have a 30-year fully amortized loan option. The maximum LTV is 60% of appraised value, and the loan terms are either a 15-year fixed, 30-year fixed due in 5, 7, or 10 years, and a 30-year fully amortized loan. Loan amounts can go as low as $25,000, and there is a 3-year minimum interest guaranty. For short term fix-and-flip loans, they lend up to 70% of after repair value, and the term is 12 months. There is a 3-month minimum interest guaranty, and lending for both short-term and long-term is available in all 50 states.

Patrick Prunty | BRE 01949337 | NMLS 1205733

Marshall Reddick Real Estate

4299 MacArthur Blvd., Ste. 102, Newport Beach, CA 92660

949-885-8173 | [email protected] | www.marshallreddick.com

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1stBank_logo

FirstBank offers excellent banking services and products, with a great focus on the investor community. After 50 years in the business, FirstBank has grown its assets to more than fourteen billion dollars.

FirstBank offers non-recourse loans to the majority of Colorado, the Phoenix Metro Area in Arizona, all of Southern California and also Central California including the Inland Empire and High Desert areas. The maximum loan-to-value is 65%. Typical loan products are 15 year fixed rate mortgage and 7/1 or 5/1 ARM that can be amortized over 15 or 30 years with a matching maturity. Generally, the bank can complete a transaction in about 35 days for someone who has checkbook control and/or where the IRA owner is signing on behalf of their plan or LLC. There is no minimum or maximum loan amounts.

To qualify for a non-recourse loan, the requirements are:

  • 75% of projected rents must cover principal, interest, taxes and insurance (PITI payments) for 1-4 family residences. No lease is required at closing
  • An analysis of personal debt service, net worth, and credit is required
  • The underlying participant(s) must meet minimum credit standard of a 680

For more information, please contact:

[email protected]

[email protected]

[email protected]

www.efirstbank.com

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First National Bank- Non-recourse lender

First National Bank of America offers loans in all 50 states for 1-4 unit residential properties. Loans for larger multi-family properties are available locally. Their maximum loan term is 10 years with a max amortization of 20 years. First National Bank of America also offers rehab loans, refinancing, and will consider loans under $50,000. The typical processing time is 30 to 45 days from application to close.

Minimum Requirements: 

  • 40% to 50% down payment available in the self-directed IRA
  • The property must generate a net operating income that exceeds debt payments by 20% to 25%

For more information please contact: 

616-538-6017 | [email protected] | www.fnba.com

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Non-recourse lenders

Mark Robbins, CEO, of Lending Resources Group has been a pioneer in helping IRA investors obtain non-recourse loans for their real estate investments, since they became available to the public in 2004. Mark was the first Mortgage Banker in the U.S. at a major mortgage banking company to offer non-recourse loans to IRA investors nationwide.Mark formed Lending Resources Group, Inc. in 2008 and continues to facilitate non-recourse loans for IRA investors from coast to coast.

LRG has helped investors obtain these loans for all types of real estate from single family homes and condominiums to duplexes, 4-plexes, multi-family apartment buildings and commercial properties. LRG has also used its wide array of private sources to fund non-recourse loans that the banks refuse to do.

For more information please contact:

415-309-1803 | [email protected] | www.lendingresourcesgroup.com

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Pacific-Crest-Savings-Bank

Pacific Crest Savings Bank was established in 1984 as Phoenix Mortgage and converted to a Washington State-charted, federally insured savings bank in 1998. PCSB combines the advantages of independent ownership with three decades of experience to offer the highest level of customer service.

They offer non-recourse loans to investment properties in Western Washington State that are held in a self-directed retirement plan such as Solo 401(k), IRA and more. The maximum loan-to-value is 50%. Positive cash flow are required. Pacific Crest offers loans to purchase, rate and term refinance, and cash out refinance.

For more information please contact:

Larry Enselman (425) 670-9623 | [email protected] | www.paccrest.com

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psrs_logo

Pacific Southwest Realty Services is a full service mortgage banking company providing our clients with a wide spectrum of financing instruments such as fixed or floating rate mortgages, equity, mezzanine debt, bridge and construction financing.

Life Company CRE Loans offer top-off loan during term, no reserves or impounds, flexible prepay terms, and lock rate immediately at loan application. All loan documents and terms are negotiable.

Loan Terms:

  • $1 Million to $100 Million
  • All commercial property types
  • Single asset or portfolio
  • Interest-only available
  • Fixed terms up to 30 years
  • Amortization up to 30 years
  • Non-recourse
  • Assumable

For more information please contact:

Trevor Blood ∙ CA DRE #01907048
11911 San Vicente Blvd., Suite 390, Los Angeles, California 90049
direct (310) 471-1977 | cell (858) 519-6553 | [email protected] | www.psrs.com

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JMac Funding

JMAC Funding is a group of private lenders located in San Diego, California who provides fast Private Hard Money Loans in California. We also buy real estate notes nationwide.

JMAC Funding offers non-recourse loans to self directed IRA LLCs that hold real estate. We are equity based lenders and we make purchase money and cash out refi loans on commercial, residential and land in California only. The loans can be structured as rehab loans or new construction, as well as for rentals. Loan terms are usually short term 5yr max, and project dependent. For rentals the project must be (or projected to be) cash flow positive with the loan in place.

Loan Terms:

  • Max Loan to Value (LTV) of 65%
  • Loan Amounts from $30K and up
  • Commercial, Residential and Land
  • Max term: 5 years

For more information, please contact:

Jim MacArthur
PO Box 91472, San Diego, CA 92169
(619) 846-1550 | [email protected] | www.TheHardMoneyPros.com

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Peak Asset Lending

Peak Asset Lending provides non-recourse loans for residential investment property. 30-year term available and no pre-payment penalties. Rate from 7.75% and up to 65% LTV available.

Financing available in markets within AL, AR, AZ, FL, GA, IL, IN, KS, MO, MS, NC, OH, OK, TN and TX. The easiest way to get pre-approved is the “Get Started” button at peakassetlending.com

  • 30 years fully amortized and no pre-payment penalties
  • Max loan amount typically $300,000. No minimum loan amount.
    • We care about the rental income over the payment amount but we will do higher loan amounts under 55% LTV
  • 50-65% LTV depending on the loan amount. Over $100,000 = 65%
  • Rehab financing is available (with full 30 year terms available even for fix and flips).
    • Up to 80% of purchase advanced at closing, and up to 80% of repair funds available for reimbursement upon completion.
  • Clients can be foreign nationals as well

For more information, please contact:

Paul Sauer | 11289 Strang Line Rd, Lenexa, KS 66215

(913) 956-7325 (PEAK) | [email protected]| www.peakassetlending.com



Comments (36)

  1. Greetings Dmitriy! Thanks for your extensive list. My current list is 1/3 of your lenders. Besides UBIT, have you heard of any horror stories regarding these types of loans/investments? Are there more success stories than failures? Your professional correspondence is greatly appreciated.  Aloha, Eldon Hongo


  2. This was such a helpful post! Thank you for this. 


    1. Nnene, happy to hear you found the list helpful!


  3. Dmitriy how can I get First National Bank of America on your list?  We provide non-recourse financing in all 50 states with non minimum loan amount.  We do cash out refinances and purchases.  

    Thank you.

    Scott D Raymond


    1. Scott, I added your bank's information to the list


  4. Great List!!! 

    I have a newbie question (please be gentle!)

    We are using a Self Directed IRA with LLC Checkbook control - and just bought our first flip at auction outright - so we own it. (Yay!!) We paid 50% of what it's worth. However, we are working with a limited amount of funds in the IRA. Don't get me wrong, we could complete the project no problem with what we have in the account. But I was wondering if I could get a "non-recourse refi" on the purchase, so we could free that capital up in case another deal comes by while we're working on Deal #1. Most of the info I see on non-recourse loans assume it's for the purchase, but we already own this one. So my questions are:

    1. Is this a normal practice? Can an SDIRA refi an asset already owned outright to free up capital? 

    2. If so, what are the tax implications? We're not planning on taking any distributions whatsoever - everything will come out of the IRA and all profits will go back into the IRA - so are there any tax implications?


    1. Congratulations on the purchase of your first investment! Yes, you can do cash-out refinance. Contact the lenders on the list to see which loan would be the best fit for you. There will be no tax consequences specifically for the refinance, but when you leverage real estate investment in an IRA the income will be subject to UBIT. Learn more here:

      https://www.biggerpockets.com/blogs/2810/26786-wha...

      Also, retirement accounts are designed to be invested passively, but flipping is considered an active business. If you run an active business in your IRA you are exposing all profits to taxation, read this article:

      https://www.biggerpockets.com/blogs/2810/54795-usi...


  5. FirstBank currently only offer services in Colorado, Arizona, and Palm Desert, California


    1. Thank you for the heads up Amy!


  6. Generally speaking, would any financial institution that offers non-recourse loans be acceptable (in addition to the list).


    1. Mike, you can get a loan from any financial institution or private individual, as long as it is non-recourse (no personal guarantee). The challenge is that most banks and financial institutions will not do such loan so your options will be limited to the list above for the most part. 


  7. @Dmitriy Fomichenkowould this list be relatively the same from when it was initially posted. I’m looking to get non recourse loan with self directed ira llc. 


    1. Yes @Giannina Biala, it has been updated several times since it was originally written. If you discover that any of the info needs to be corrected please let me know.


  8. Hello Dmitriy,

    Great list! 

    I work for Peak Asset Lending, and I was wondering if I could update some of the information on this post. We've made some changes in the company, and just want to  make sure everyone is getting accurate information. 

    We really appreciate you featuring us!


    1. Sure Emily, please send me a private message and we will be able to help you out.


  9. I just called Peak and it was easy and simple to get rates and an idea of costs for my cash-out deals inside my SDIRAs that I have with Equity Trust Company. Thanks BP! 


    1. I'm glad it worked out well for you and thanks for sharing about your experience with Peak.


  10. Assuming you leverage a purchase within your SDIRA, Is it simple to accelerate payments to pay off the loan balance in full to avoid paying taxes on proceeds from the sale of the property?


    1. Adam, you can accelerate payments of the loan. However you must check your loan documents to see if it has any pre-payment penalties, some loans do have such clause. 


  11. Thanks for the post. This is very helpful!


    1. You are welcome!


  12. Thanks


  13. Awesome, thanks for putting this together!


    1. You are welcome! Glad you found it helpful.


  14.  @Dmitriy Fomichenko

    AWESOME LIST!!!!!!!!!!!!!!!!!


    1. Patsy, I'm glad you found it useful. 


  15. Firstly thank you Dmitriy Fomichenko. I wanted to know if you have a list like this for fix and flip homes. All I see is the normal 12% and 3-45 points. Would love to find cheaper money.

    Thanks again


    1. @Noam Adler, I'm sorry but I don't have a list of lenders for flippers. My specialty are self-directed IRAs and 401Ks, and with those financing would have to be non-recourse specifically, the lenders on this list are providing such financing. 

      10-12% for flips with few points in pretty much the norm, not sure if you can find something that is much better. What you could try is if you know someone with funds in their IRA that are getting 1% or less in a CD and you will offer them 6% secured by real property - they might be willing to lend to you (this would require self-directed IRA).


  16. How do I get Peak on this list?  @Dmitriy Fomichenko   

    80% LTC and up to 65% LTV.  30 year terms.  Rehabs are fine.  No minimum loan amounts (but LTVs are tiered down for smaller loans).  Rates from 7.75%


    1. @Dustin Lauer, are you providing non-recourse loans to IRAs and 401Ks? 


      1. @Dmitriy Fomichenko Yes non-recourse lending to retirement accounts since 2008!  Rehabs, turn key rentals, refinances, rehab to perm loans, resale to perm loans (30 year loans even for clients planning to resale).  No mimimum loan amount and rates as low as 7.75% (full 30 year terms, fully amortized).  We need to also get Sense Financial on our website.  Please email me about that.  Website listing at Peak  Loan Programs


      2. Great Dustin, I'll have Vanessa, our marketing manager contact you to coordinate all of the details.


  17. Thank you for sharing!


    1. You welcome!


  18. this is awesome @Dmitriy Fomichenko! Thanks for putting this together! 


    1. Your are welcome @Brandon Turner! I'm glad you found it useful.