Problem using HELOC to purchase Real Estate

[Keith W.]

I have about $80K equity available in my primary residence. I also have an investment property that was purchased and held in an LLC.

The bank is requesting all kinds of documentation on the investment property including insurance docs, private loan docs, year-end statements, etc. ) 

I don't feel like this is necessary since the loan is against my primary residence and not the investment property. The investment property is not on my personal credit nor is it held in my personal name. 

Can anyone advise as to whether is normal procedure? 

[Kevin Romines]

If it is a single member LLC, then all profits and losses will flow through on to your personal return. However if it is a multi-member LLC and the LLC files its own tax return, and if the loan made on the property was commercial and did not require any kind of personal guarantee, then the loan and property are considered commercial and as such, should not show on the loan app.

However if any income from that LLC hits your personal return, then most likely the lender will want at least a copy of the LLC's tax return. They may not need all the specific details on the home, just the LLC tax return.

I do a lot of loans for investors, this is my experience with underwriting on these scenarios. 

I hope this helps.