Help me understand some Financing Requirements !

We own 3 SF rentals and 1 - 4plex rental free and clear.
These are owned by a LLC (S-corp pass-thru/ KS) and were always owned by the LLC.
I want to get some money out - Equity Loan / HELOC. 70% LTV or even 60% LTV ok.
FICO = 800+
Have all the reserves required by the new guidelines.
We have a mortage on our primary residence.

The Loan Specialist at the Bank sent me an email saying this:

it cannot be in the name of an LLC. Fannie/Freddie simply won’t allow it. Also – was it always owned in the name of the LLC? It’s possible we could remove it and then return it to the LLC – but I will need to check the guidelines to make sure.<<<

I want to be more proactive and she is bit unresponsive atm with all the ppl refinancing, so my questions are:

a) Is she right in saying it cannot be in LLC name? I looked at the latest guidelines, it didnt say anything like that but it does seem understandable.

b) Whats the easiest way to move it under personal name and move it back to LLC? The Insurance / Leases / Depreciation etc are all under the LLC name. Any tax issues that might crop up?

c) Would like lowest rate with longest term :smiley: Any other avenues I should be looking at?

Thanks in advance!


She is correct that it cannot be in the name of an LLC. The easiest way to do it is to use a quit claim deed. However keep in mind that once you change it to your personal name and refinance it the lender may not allow you transfer it back into the name of your LLC.

I would suggest looking at a local bank or credit union in your area. They will allow the LLC and will probably give you comparable terms that you will get with a broker/banker although you probably will not find a 30 year fixed loan as local banks don’t like their money tied up for that long of a term. Hope this helps.

There is also going to be a seasoning requirement of 6 months for FHA Refi.

12 months seasoning on FHA and these are rentals so the OP would not qualify for FHA financing unless one of the properties is currently FHA financed which seems unlikely because they are in the name of an LLC.