How does a commercial loan effect my personal DTI ratio?

[Jeff White]

I am purchasing a duplex utilizing an LLC and a commercial loan. I am also planning to buy a personal residence within the next 6 months. I have a sizable downpayment for my personal residence, but will need to finance the remainder. Will the timing of my commercial loan prohibit me from securing a loan for my primary residence due to the newly acquired debt? In other words, does a commercial loan under an LLC impact my debt to income ratio, or since it is a cash flowing property, will lenders not count that debt against me?

[Greg Downey]

@Jeff White. I get asked this question ALL of the time. The only way that the loan to your LLC will effect your credit will be the hard inquiry when they do the underwriting for the loan. This typically will drop your score like 5 points or so (not an exact science on the credit scoring). It will NOT show up as a trade line on your PERSONAL credit. Whether the loan is or is not recourse should have no bearing on how it is (or is not in this care) reflected as a trad line on your personal report. non-recourse loans are not incredibly common on loans under $1MM in my experience.