Commercial Loan to LLC affect Personal DTI Ratio?

[Marco G.]

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.

[Bob Green]

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.