Refinance on property in LLC

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Refinance on property in LLC

Trevor Carter
Member since 2020 · 4 posts · 2 votes

Hi All! I am looking to refinance a rental property I have in an LLC. My banker said many of her clients quitclaim out of the LLC into personal names, then refinance with conventional loan, and then quitclaim back into the LLC. Anyone see problems here? I would stand to save 200/month on the refi, so it is appealing. Thoughts?

Thanks from Bozeman MT!

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  • Eric Veronica
    Lender · Cleveland, OH · Member since 2011 · 588 posts · 439 votes
    6y

    check out this thread 

    https://www.biggerpockets.com/forums/49/topics/610831-oh-yeah-the-due-on-sale-clause-is-now-llc-friendly-sometimes

    0Reply
  • Kevin Romines
    Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
    6y

    Yes, Fannie Mae changed their rules on 6/1/2016 to now allow a borrower to transfer title to an LLC that the borrowers on the loan are the majority members of, without it triggering a due on sale clause. See the guideline below:

    0Reply
  • Tim Debronsky
    Full-Time Investor & Agent · Amherst, OH · Member since 2014 · 149 posts · 50 votes
    6y

    @Trevor Carter

    You shouldn’t have any problem with unit claim. We just did several refinances that way.

    0Reply
  • Trevor Carter
    OP
    Member since 2020 · 4 posts · 2 votes
    6y

    @Eric Veronica

    Will do. Thank you!

    1Reply
  • Trevor Carter
    OP
    Member since 2020 · 4 posts · 2 votes
    6y

    @Kevin Romines

    This is perfect. Thanks!

    0Reply
  • Trevor Carter
    OP
    Member since 2020 · 4 posts · 2 votes
    6y

    @Tim Debronsky

    Thank you

    0Reply
  • Lorena Perez
    Member since 2020 · 3 posts · 0 votes
    6y

    I have a property already under an LLC, but we need to refinance to lower the monthly payments. We currently have 7.5% rate, and we see there are lower mortgage rates out there right now. I'm having trouble finding a lender that will refinance under an LLC. Any tips?

    0Reply
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