Closing in an LLC
Most DSCR programs allow the loan to close in the name of an LLC, which is one of the main reasons investors choose them. The lender will review the entity documents, and the individual owners usually sign a personal guarantee.
- Articles of organization and the operating agreement
- EIN letter from the IRS
- Certificate of good standing
- Who owns what percentage, and who is authorized to sign
Holding title in a trust
A revocable living trust is generally acceptable on title, and you do not need to create an LLC to use one. The title company and the lender will review the trust or a certification of trust to confirm who the trustees are and that the trust has the power to borrow.
Irrevocable trusts are generally not eligible. If a property sits in one, it usually has to be deeded out — to you or to an LLC — before closing.
More than one property, more than one entity
If you are financing several properties together, many lenders want them all vested the same way — one entity or one person. Properties spread across different trusts or LLCs may need to be brought into a single vesting first. Find this out early: it is a title and attorney question as much as a loan question, and it takes time.
Ownership time carries over
If you move a property from your name into your own LLC or revocable trust, the time it was held there generally counts toward ownership seasoning — which matters for a cash-out refinance.
Every file is different. Guidelines, pricing and eligibility vary by lender and are subject to credit approval and property eligibility — we’ll walk you through exactly what applies to yours.