In this article, we will cover and discuss investment LLC property mortgage guidelines for real estate investors buying or refinancing properties. Investors commonly use investment LLCs (Limited Liability Companies) to purchase and manage properties for investment purposes. When it comes to obtaining a mortgage for properties held by an Investment LLC, there are certain guidelines and considerations to keep in mind: Can you close your investment property under a limited liability corporation?
Most of the non-QM wholesale lenders associated with Gustan Cho Associates allow the investment property purchase or refinance to close under a Limited Liability Corporation (LLC).
This is great news for real estate investors who need to separate their investment property from their personal names. However, borrowers need to understand that this does not mean the investment property is a non-recourse loan. It is still a recourse loan and the borrower is still on the hook and personally liable for the investment property loan. In this article, we will discuss and cover Investment LLC Property Mortgage Guidelines.
Investing In Real Estate During a Booming Housing Market
The housing market is booming. There is a major shortage of homes versus the demand for homebuyers. Many real estate investors are getting back to investing in real estate again. Countless investors lost their real estate holdings during the 2008 real estate and mortgage meltdown. The Great Recession of 2008 was the longest-lasting recession in history. Many considered it as the Second Great Depression and not a Recession.
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LLC Formation To Meet Investment LLC Property Mortgage Guidelines
You must have a properly formed Investment LLC before applying for a mortgage. This typically involves registering the LLC with the appropriate state authorities and adhering to all legal requirements. Lenders will require a comprehensive business plan of your investment strategy, expected income, and how you manage the property.
While obtaining a mortgage for an Investment LLC is possible, lenders often require personal guarantees from the LLC members or owners. If the LLC defaults on the mortgage, the individuals involved may be personally liable.
Lenders will evaluate the LLC’s and its members’ creditworthiness. Good credit and financial payment history can improve your mortgage qualification and approval. The type of property you’re investing in can impact your ability to secure a mortgage. Residential properties are generally easier to finance than commercial properties.
Investment LLC Property Mortgage Guidelines on Down Payment Requirements
Expect to make a larger down payment than purchasing a property under your name. Investment property loans typically require a down payment of 20% or more. Interest rates for investment property mortgages are often higher than primary residences. Be prepared for slightly higher borrowing costs. Loan terms may vary but are typically shorter than those for primary residences. A common term is 15 to 30 years.
Lenders will evaluate the LTV ratio, the loan amount relative to the property’s appraised value. Lower LTV ratios can improve your mortgage terms.
Prepare all necessary LLC documentation, including the operating agreement, articles of organization, and tax identification number, as lenders may require these during the application process. Lenders may ask for proof of cash reserves to cover potential expenses related to the property, such as maintenance and vacancies. You will likely need to obtain hazard insurance for the subject property, including liability and property insurance. Be aware of local regulations and zoning laws that may affect your ability to use the property for investment purposes.
Lender Selection with No Overlays on Investment LLC Property Mortgage Guidelines
Not all lenders offer mortgages to LLCs, so shopping around and finding a lender specializing in investment property financing is essential. Consult with a tax advisor to understand the tax implications of holding property in an LLC, as it may affect your overall investment strategy. Working with an experienced, knowledgeable real estate attorney and accountant is crucial when obtaining a mortgage for an Investment LLC.
They can provide guidance tailored to your situation and help ensure compliance with all legal and financial requirements. Additionally, it’s recommended to research and compare different lenders to find the most favorable terms for your investment property.
Many Investors Turning To Real Estate As Investment of Choice
The real estate market is hot. Many areas in the country are appreciating double digits. There is a major rental market shortage throughout the U.S. Real estate investors were limited to cash-only investment after the 2008 Real Estate Crash due to a halt in investment property financing.
Fannie Mae-Freddie Mac’s 5 to 10 financed properties limited real estate investors to a maximum of 5 to 10 financed properties on conventional loans.
Gustan Cho Associates Mortgage has now launched alternative finance loan programs with no limit on the number of properties financed. We have no income documentation and bank statement loans on investment properties with no federal income tax required. Investment LLC Property Mortgage Guidelines enable investors to close their real estate loans under a Limited Liability Company.
Types of Investment Loan Programs Allowed To Close Under LLC
Gustan Cho Associates Cash Flow mortgage program allows investment property borrowers to qualify based on rental analysis to determine property cash flow. Borrowers’ personal income is not required. Personal income tax returns are not required to meet qualification requirements. This often saves borrowers countless hours in preparing financial statements and federal income tax returns.
High-Lights of Asset Based Investment Home Mortgages That Can Close Under LLC
Here are the highlights:
- No personal income used to qualify
- Qualification requirements are based on the subject property cash flow
- There is a mandatory 2 years seasoning after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale to qualify
- Minimum credit scores down to 620 FICO
- Starting Mortgage Rates at 6.0% range and up
- 20% down payment requirements
- Borrowers income and/or debt to income ratio does not matter
- Must have a current mortgage
- 1-4 units and condominiums
- No limit on the number of properties financed
- Loans up to $5 million
- Up to 2% in seller concessions allowed to use for closing costs
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Investment LLC Propert Mortgage Guidelines on Asset Depletion Loan Program
Gustan Cho Associates offers Asset Depletion Loan Programs. This loan program is for real estate investors with no income but has substantial liquid assets. Please click on Our Asset Depletion Loan Program Guidelines for more detailed information and watch our video/blog. Under our Investment LLC Property Mortgage Guidelines, borrowers can close asset depletion loan programs under Limited Liability Company (LLC). if you are ready to get free quote then
Investment LLC Property Mortgage Guidelines and Requirements
Gustan Cho Associates, per Investment LLC Property Mortgage Guidelines, allows investment homes to be under a Limited Liability Company. It needs to be solely an LLC for real estate investments. It cannot be an LLC for an automotive business, dry cleaners, law office, or any other entity. It needs to be a valid LLC from any state in the U.S. It cannot be a partnership. If you do not have an LLC and want to create one, you are allowed to do so per Investment LLC Property Mortgage Guidelines. Setting up a Delaware Limited Liability Company is best. There are benefits and advantages to why a Delaware LLC for investment real estate is recommended. This blog is not to engage in legal or accounting advice.
Experts Advice on Investment LLC Property Mortgage Guidelines
Gustan Cho Associates has a national reputation of being able to do loans other lenders cannot do. Over 80% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders due to a last-minute mortgage loan denial or because the lender did not have the mortgage loan option the borrower was looking for. We have a wholesale lending network with over 220 lenders and investors. We have every non-QM and alternative loan program for single family homes, second homes, and investment properties. Here is what our investment property senior mortgage Adviser Alex Carlucci stated:
When debt-to-income is too high for investment properties, there are debt-service coverage loans. Debt-service coverage loans go off of the cash flow of a property. Debt Service Coverage Calculation is done as follows: Add principal, interest, taxes, insurance, and homeowners association dues. Then divide it by the projected rent of the subject property. Programs go up to 100% debt-service coverage
Fix and flip loans are for real estate investors looking to buy and rehab a property to sell or hold. New Construction loans are similar to fix and flip loans. Line of credits is available for both fix and flip and new construction loans and is offered at Gustan Cho Associates. I strongly recommend a Delaware LLC.
Delaware General Corporation Law is generally considered pro-business. Delaware keeping business laws up to date. The technology, easy access to services, and information stored electronically For tax purposes, its benefits is Delaware’s reputation to corporate law and their attitude towards corporation law and the efficiency of the law and low start up costs and annual fees and maintenance Once ready to form an LLC, a company can be paid to set up a Delaware LLC. Can set one up on your own through the division of online services for Delaware. Can follow the how to formon Delaware’s website. Only some commercial investors prefer a Delaware LLC.
Investment LLC Property Mortgage Guidelines on The Types of Documents Required
If borrowers were to close the investment property under an LLC, lenders will require the following documents. Article Of Organization, which is also referred to and/or known as the certificate of formation. This form contains the legal name of the Limited Liability Company. It also names the managing partner, members of the LLC, and contact information of the registered agent. Duties of each member. Ownership information of stockholders. There is the operations agreement that needs to be submitted as well.
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Qualifying For Investment LLC Property Mortgage Guidelines With a Lender With No Overlays
Real estate investors who need to qualify for an investment mortgage loan under the name of an LLC, please contact us at Gustan Cho Associates. We are experts in helping real estate investors get financing. Many of our borrowers often do a 1031-Tax Exchange when selling a property and need to purchase a like or higher value property. If they are selling their property in the name of an LLC, they need to purchase the new property under the name of the same LLC to take the 1031 tax benefits.
We can help. Please contact us at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. The team at Gustan Cho Associates is available 7 days, evenings, weekends, and holidays.
Frequently Asked Questions About Investment LLC Property Mortgage Guidelines:
Q: Can I Buy or Refinance an Investment Property Under My LLC?
A: Yes, you can! Most lenders that follow investment LLC property mortgage guidelines—like Gustan Cho Associates—allow you to close your loan under a Limited Liability Company (LLC).
Q: Am I Still Personally Responsible for the Loan if I Use an LLC?
A: Yes. Even if you buy under an LLC, most lenders still require a personal guarantee, meaning you’re still responsible if the loan goes unpaid. That’s part of the investment LLC property mortgage guidelines.
Q: Should I Set Up the LLC Before Applying for a Loan?
A: Yes. The investment LLC property mortgage guidelines require your LLC to be legally formed before you apply. That means having your articles of organization, operating agreement, and tax ID ready.
Q: What Credit Score do I Need to Qualify?
A: Most lenders want to see at least a 620 credit score, but some go lower or higher depending on the program. Under the investment LLC property mortgage guidelines, your personal and LLC credit may both be reviewed.
Q: How Much do I Need to Put Down?
A: Typically, a 20% down payment or more is required. This is standard under most investment LLC property mortgage guidelines, especially for non-QM and DSCR loans.
Q: Do I have to Show My Personal Income?
A: Not always. Some programs, like DSCR loans, let you qualify using only rental income from the property. These are allowed under investment LLC property mortgage guidelines; no personal income or tax returns are needed.
Q: Can I Use a Delaware LLC for Better Benefits?
A: Yes! Many investors prefer Delaware LLCs because of their low costs and business-friendly laws. It’s a popular choice under investment LLC property mortgage guidelines.
Q: What Documents do Lenders Ask for When Using an LLC?
A: You’ll need your Articles of Organization, Operating Agreement, and your LLC’s EIN (tax ID). These are required under all standard investment LLC property mortgage guidelines.
Q: Can I Finance More Than One Property in an LLC?
A: Yes. At Gustan Cho Associates, unlike Fannie Mae or Freddie Mac, there’s no limit on the number of properties financed under investment LLC property mortgage guidelines.
Q: What if I had a Bankruptcy or Foreclosure Before?
A: You can still qualify! Some programs require only a 2-year wait after a bankruptcy or foreclosure. These flexible terms are part of certain investment LLC property mortgage guidelines.
This blog about “Investment LLC Property Mortgage Guidelines For Investors” was updated on July 4th, 2025.
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