Can I get a DSCR loan in an LLC?
The short answer
Yes. Most DSCR programs let you buy or refinance in an LLC, corporation, or other business entity, and many investors prefer it. You'll usually sign a personal guarantee, and the lender will ask for the entity's formation documents. The Mortgage Advisory closes DSCR loans in LLCs regularly and tells you up front exactly what paperwork is needed.
Why do investors use an LLC?
Investors often hold rentals in an LLC to keep each property's business separate and for liability planning. Talk with your attorney or CPA about whether it's right for you; that part is their call, not mine.
What documents will the lender need?
- Articles of organization (or incorporation)
- Operating agreement showing who owns the LLC
- EIN letter from the IRS
- Certificate of good standing from your state
- Signer authority, if more than one member
Do I still have to personally guarantee the loan?
Usually, yes. Most DSCR lenders ask the owners (often anyone with 20% or more) to personally guarantee the loan, and they look at your personal credit.
Can I move a property I already own into an LLC?
Sometimes, but be careful: transferring a property out of your name can trigger the due-on-sale clause on a regular mortgage. A common path is to refinance into a DSCR loan directly in the LLC's name. Talk with me and your attorney before you deed anything over.
Our take
If you're planning to build a portfolio, set up your LLC before you find the property so the paperwork is ready. I'll send you a short checklist so the entity documents don't hold up your closing.
Ace Ausar, Mortgage Banker · NMLS #1143018
The Mortgage Advisory, Inc. · NMLS #1549739
Reviewed by Ace Ausar, NMLS #1143018 · Updated
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