Hi again. I recently read that banks don't allow entities to take out a mortgage loan, specifically LLCs. Apparently, there is a 'loophole' that allows the title to be transferred from the buyers name to the LLC, but it may present a 'Due on Sale' clause. Is anyone familiar with the likeliness of this happening in Nevada. In other words, will the transfer ALWAYS attract a 'Due on Sale' clause?
@Kayla Holbert You don't have to transfer title to individual name before you start the process of refinancing. You can quit claim at the closing or before depend on the lender requirement.
@Harjeet Bhatti Well not in terms of refinancing, but just taking out a first mortgage on a home in the name of an LLC. I'm still fighting with my credit union for a solid answer, but they have yet to mention anything about due on sale.
@Kayla Holbert According to guidelines you can't close on LLC name nor in purchase or refinance. Transferring the title after closing has different guidelines.
D1-4.1-02: Allowable Exemptions Due to the Type of Transfer (11/08/2017)
@Kayla Holbert , a conforming loan (i.e. the typical consumer residential mortgage loan) owned by Fannie Mae may be eligible for transfer to an LLC - under certain conditions described in section D1-4.1-02. I recently wrote a Blog article to explain it: How to Transfer Property to your LLC without fearing Due-on-Sale
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