Homepath LLC with international investor?

Question

Hey Guys

My name is Daniel. for the last 3  years I was buying real estate in Detroit area.

Im from Israel and doesnt have any american citizenship. a good friend of mine is a citizen and have a credit score of 729 with a decent job. my question is, can I create an LLC with him and then buy properties and using loans from homepath on his name and credit and have my name on the LLC as well?

thank you

Daniel.

Account Closed · Answer

@Daniel Gura From Homepath website:

"HomePath financing, available only on Fannie Mae-owned properties, offers great benefits — a 5% down payment (as of November 16, 2013), no mortgage insurance, expanded seller contributions, and more. HomePath Mortgage is available for move-in ready properties for both owner occupants and investors — a limited number of HomePath lenders also now offer HomePath Mortgage for the LLC borrower. The HomePath Renovation Mortgage provides both the funds to purchase and to renovate in one loan. You also can use the financing of your choice from any lender, such as your local bank, credit union or other financial institution."

Here's a link with more information:

Homepath Investor Financing

Looks like it's 70% LTV and LLCs are eligible for loans.

I have never done Homepath loans, but something to look into for you.

Good luck and keep us updated on the loan progress!!

Michael Smith · Answer

In that scenario there's always the risk of activating the DOS clause

Bill Tyler · Answer

I purchased a house in Detroit through Homepath in 2011.  I went through the "First Look" (owner occupied) and actually moved up there for a year. It was a very good learning experience for me being from Texas.  However, keep in mind that there is a HUGE learning curve for Detroit.  In many cases, I found that it was like a 3rd world country.

Unfortunately, I'm not able to help you regarding the LLC.  I would highly recommend find a good realtor from that area that has experience with Fannie Mae processes - because they can be tricky.  Also - make ABSOLUTELY CERTAIN you add a clause to the offer/contract that ALL back taxes and water bills must be paid IN FULL before close.  DO NOT deviate from that.  They offered an allowance on the water bill of about $250 for mine and I would be responsible for the rest.  Come to find out the outstanding water bill was nearly $4,000!!!  Oh - and Fannie Mae spent nearly $10,000 to sell me the house for my offer price of $600.00

Daniel Gura · Answer

Hey Max

thank you so much for your help!!

I really do appreciate it

Account Closed · Answer

@Daniel Gura Is the 90% LTV for owner occupants or investors also? How many of these loans can you get from Homepath?

There are some local banks that will be willing to give you loans on properties that are around $50k. You just have to call a lot of them to find one.

The area where I invest there are some banks that will loan on low price properties also.

Daniel Gura · Answer

Only for long term. I saw that for some properties they offerd up to 90%.

also, many of the properties Im looking are under 70k and some banks that offer me to buy as a non resident reqwire that the house value will be over 130k

Account Closed · Answer

@Daniel Gura By doing a QCD to the mutual LLC, you risk triggering a DOS clause.

What is the leverage they are providing you? Why do you need to form an LLC? Are you looking to hold these as rentals or flips?

Daniel Gura · Answer

The reason Im trying to use homepath is because they allow up higher leverage.

so you think my best chances is to buy it under my american friend personal name, and then after that to QCD it to the mutual LLC?

thanks!

Account Closed · Answer

Here's a little more information on DOS clause.

Due on Sale Clause

@Daniel Gura Why do you need loan from Homepath? Can you try going to a local bank that will lend to a LLC with personal guarantee?

As a foreign investor, you can purchase Homepath properties in LLC name, but I have not heard anyone get a loan from Homepath in LLC name.

Michael Smith · Answer

@Daniel Gura that's the "Due on Sale" clause.

Homepath LLC with international investor?

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