Smart Investors are Closing Mortgage Under LLC—Here’s Why

Closing Mortgage Under LLC: How Real Estate Investors Can Use an LLC to Get a Mortgage

Are you a real estate investor wondering how closing mortgage under LLC works? You’re not alone. Investors often choose to buy or finance rental properties through a limited liability company (LLC) instead of using their personal names. This guide will explain how everything works. It will cover the benefits and drawbacks, the documents you need, and how to get approved by the team at Gustan Cho Associates.

Let’s dive in!

What Does Closing Mortgage Under LLC Mean?

When you buy a home and take out a mortgage, the loan is usually in your personal name. Closing mortgage under LLC means the mortgage and property title are in the name of your LLC instead of you personally.

This strategy is common for real estate investors who want to:

• Protect personal assets from lawsuits
• Separate business from personal finances
• Build a real estate portfolio
• Take advantage of certain tax benefits

But this approach only works for investment properties, not homes you plan to live in. This strategic exchange allows investors to defer capital gains tax by selling a profitable investment property and reinvesting the proceeds into a similar or higher-priced property.

Can You Close a Mortgage Under an LLC?

Yes, but not all lenders allow it. Most traditional banks do not let you close a mortgage under an LLC, especially if the property is residential. Why? Because they prefer working with individuals, not business entities.

But there’s good news.

At Gustan Cho Associates, we specialize in closing mortgage under LLC for rental homes, fix-and-flips, and even new construction projects. We work with non-QM lenders who are flexible with guidelines and understand the needs of real estate investors.

Is It Legal to Transfer a Property to an LLC After Closing?

A common mistake investors make is buying a property in their personal name and using a quitclaim deed to transfer ownership to their LLC after closing. This move can violate the due-on-sale clause in the mortgage. That means your lender can call the loan due immediately.

While it may not be technically illegal, it is against most lender agreements and could put your property at risk.

The best way to avoid this risk? Work with a lender like Gustan Cho Associates who allows closing mortgage under LLC from the start.

What Type of Properties Qualify for LLC Mortgages?

You can only use an LLC to close on non-owner-occupied properties, such as:

• Single-family rental homes
• 2- to 4-unit multi-family properties
• Fix-and-flip projects
• Investment condos
• New construction projects for resale or rental

Primary homes (where you live) cannot be closed under an LLC.

If you plan to buy, rent, flip, or develop real estate as an investor, closing mortgage under LLC is the right move for you.

Benefits of Closing Mortgage Under LLC

1. Asset Protection: If someone sues over something that happens at the property, they sue the LLC—not you personally.
2. Tax Flexibility: You can select the taxation method for your LLC and frequently deduct business expenses.
3. Build Business Credit: Your LLC can eventually qualify for loans and credit on its own.
4. Privacy: Your personal name isn’t listed in public real estate records.
5. Separation of Finances: Keeps personal and business accounts clean and easy to manage.

Investors love the long-term benefits of owning property this way. That’s why closing mortgage under LLC has become more popular.

What Are the Drawbacks?

• Fewer lenders available: Not every mortgage lender allows LLC closings.
• Higher rates and fees: Investment property loans usually cost more than personal home loans.
• Personal guarantee required: Many lenders still want the individual to sign personally for the loan.
• More paperwork: You’ll need to submit documents for the LLC, not just yourself.

At Gustan Cho Associates, we’ll guide you through the whole process and help you avoid common mistakes.

What You Need to Close a Mortgage Under an LLC

To qualify, your LLC must be legally formed and active. Here’s what you’ll need:

LLC Documents

• Articles of Organization or Certificate of Formation
• Operating Agreement showing who owns what percent and who runs the LLC
• W-9 Form for the LLC’s tax ID (EIN)
• Organizational Chart listing all members and their roles
• Certificate of Good Standing (if required)

Additional documents might be needed if the property is in a state different from your LLC. We’ll help you figure out what applies to your deal.

Most Popular LLC Mortgage Loan Options

At Gustan Cho Associates, we offer several loan programs that allow closing mortgage under LLC:

1. DSCR Loans (Debt Service Coverage Ratio)

Perfect for rental properties. No income verification is needed—we qualify based on rental income.

2. Fix-and-Flip Loans

Short-term loans for investors buying distressed properties to renovate and resell quickly.

3. New Construction Loans

Ideal for small builders developing 1-to-4-unit properties under an LLC.

4. Bank Statement Loans

Great for self-employed investors who don’t show enough income on tax returns.

We even offer no-doc options for qualified investors with strong equity or down payments.

Why Work with Gustan Cho Associates?

We’re not like most lenders. At Gustan Cho Associates:

• No lender overlays: We go by agency or investor guidelines only
• LLC closings welcome: We regularly close loans in the name of LLCs
• Experience matters: We’ve helped thousands of investors nationwide
• Fast closings: Especially for fix-and-flip and non-QM loans
• All 50 states: We lend where your LLC operates

If you’re ready for closing mortgage under LLC, our team is here to help from start to finish.

Steps to Get Pre-Approved for a Mortgage Under LLC

1. Form your LLC (if you haven’t already)
2. Get an EIN number from the IRS
3. Open a business bank account
4. Gather your LLC documents (see list above)
5. Call Gustan Cho Associates to get pre-approved in minutes

We’ll match you with the best loan program for your investment goals.

Final Thoughts: Is Closing Mortgage Under LLC Right for You?

If you are committed to accumulating wealth via real estate, securing a mortgage under an LLC is one of the most intelligent methods to safeguard yourself and expand your investment portfolio.

With the right lender on your side, it’s not complicated.

At Gustan Cho Associates, we make the process easy, fast, and investor-friendly. Whether buying your first rental or developing multiple properties, our experts will walk you through every step.

Borrowers who need a five-star national mortgage company licensed in 52 states with no overlays and who are experts on closing mortgage under LLC, please contact us at 800-900-8569, text us for a faster response, or email us at gcho@gustancho.com.

Frequently Asked Questions About Closing Mortgage Under LLC:

Q: What does Closing Mortgage Under LLC Mean?

A: It means putting the mortgage loan and property title in the name of your LLC instead of your personal name. Many real estate investors do this to protect their personal assets and keep business separate from personal finances.

Q: Can I Buy a House and Close the Mortgage Under My LLC?

A: Yes, but only for investment properties—not your primary home. Not all lenders allow it, but lenders like Gustan Cho Associates specialize in closing mortgage under LLC.

Q: Can I Transfer a Property to My LLC After I Close on it?

A: That’s risky. Most lenders don’t allow this, and it could trigger a “due-on-sale clause,” meaning they could ask for full payment of the loan. It’s better to do the closing mortgage under LLC from the start.

Q: What Types of Properties Can I Buy with a Mortgage Under My LLC?

A: You can use an LLC for rental homes, fix-and-flip projects, small multi-family buildings, and new construction for investment. You can’t use this method for a home you plan to live in.

Q: What are the Benefits of Closing Mortgage Under LLC?

A: You get personal asset protection, more tax options, business credit building, and privacy since your name isn’t on public records. It also helps keep your finances organized.

Q: Are There Downsides to Closing a Mortgage Under an LLC?

A: Yes, there can be. Not all lenders allow it; rates might be higher, and you’ll likely need to personally guarantee the loan. You’ll also have more paperwork to show your LLC is legit and active.

Q: What Paperwork do I Need to Close a Mortgage Under an LLC?

A: You’ll need your LLC’s Articles of Organization, Operating Agreement, EIN number, W-9, and an organizational chart. If your property is in another state, you might need extra documents.

Q: What Loan Options Allow Closing Mortgage Under LLC?

A: You can use DSCR loans, fix-and-flip loans, bank statement loans, and new construction loans. Gustan Cho Associates offers all these with flexible investor guidelines.

9. Can I Still Get Approved if I Don’t Show Much Income on My Taxes?

A: Yes. If you’re self-employed or write off a lot, we have bank statements and no-doc loan options that still let you qualify for closing mortgage under LLC.

Q: How do I Get Started with Closing Mortgage Under LLC?

A: Form your LLC, get your EIN from the IRS, open a business bank account, and call Gustan Cho Associates. We’ll help you get pre-approved fast and walk you through every step.

This blog about “Closing Mortgage Under LLC Versus Individual Name Of Borrowers” was updated on June 26th, 2025.