Mortgage for LLC - should the LLC be on the mortgage?

6 Replies

I'm looking at getting a loan for an LLC company I have with a partner.

My conventional mortgage lender said that in regards to the loan, it always lists the individual(s) names, and NOT the LLC name. Is this accurate and typical? Or should it list the LLC? If it doesnt, is there anything I should be concerned about?

Thanks!

Getting a loan for an LLC is tougher, as many just won't do it, which is what your lender is telling you.

I actually closed my LLC. While there were many reasons, one of the reasons is that you cannot get a loan in an LLC unless it is commercial (at least in my experience). Therefore they are all recourse and LLC did nothing in this case

Most conventional lenders will not write a non-recourse loan until the LLC is well established with mole collateral. Until then, it's personal guarantees if you want market rates.

mole = ample.   spell check with humor.   

Government subsidized loans from a GSE (Government Sponsored Entity, like Fannie Mae) comprise 90% of all loans... and the GSE underwriting only lends to HUMANS. So since an LLC is not a human, and many (most) banks only deal with GSE underwriting, the typical response is 'you can't do that...'

An LLC loan from the commercial side of the bank usually costs a little more... and with terms that are not as good as through the government subsidy... but LLCs get loans every day all across the country. And the rate/term difference is not all that much for most well qualified borrowers.

Awesome, this info is all very helpful, thank you very much!