Commercial Loan to LLC affect Personal DTI Ratio?

3 Replies

Anyone know offhand how a commercial loan on a property held by an LLC affects the individual shareholder’s personal DTI for loans to the individual? It’s expected the commercial property held by LLC will show a tax loss.

If you were to,personally guarantee it, it would very likely. If it was non recourse then probably not, but that doesn’t mean the bank couldn’t count it if they wanted to...

@Marco G. Different lenders would look at it differently. it is always best to speak to various lenders (local and those who work online) and see what you can get. It also depends on the type of the assets you are looking to purchase and the type of loan you are trying to get. On some of the loans, the lenders only focus on the viability of the asset itself. 

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Marco,

If you go to a local bank and apply for a commercial loan in the name of a LLC or not, the bank will look at both your debt to income ratio and global debt service ratio meaning they evaluate cash flow of the property + debt to income. It must meet a certain criteria. There are portfolio lenders who do NOT look at your personal DTI, and focus on credit, cash flow of property, location and loan to value to approve you.

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