Yes, an LLC can get a mortgage, but not through the conventional agency channel. Loans sold to Fannie Mae must be made to individuals, so LLC borrowers usually use business-purpose investment loans such as DSCR loans. These qualify the deal on the property’s rental income and let the loan close in the LLC’s name. This guide covers how that works, what documents lenders ask for, where personal guarantees come in, and how to handle a refinance.
TL;DR
- A conventional Fannie Mae loan cannot close in an LLC’s name. Business-purpose investment loans, including DSCR loans, are built for LLC borrowers.
- LLC loans are for investment (non-owner-occupied) property only. They are not a path to financing your primary home.
- Expect to provide the LLC’s formation documents, EIN, good standing proof, and often a personal guarantee from the owners.
- A DSCR loan qualifies the property on its rental income, so your personal income is not the deciding factor.
- Cash-out on an LLC-owned property can be done two ways: deed it out for a conventional loan, or keep it in the LLC with a DSCR cash-out.
Table of Contents
- Can an LLC get a mortgage?
- Why investors buy in an LLC
- Loan programs that work for LLC borrowers
- How a DSCR loan works for an LLC
- What you will need to provide
- Personal guarantees: what they mean
- Refinancing and cash-out on an LLC-owned property
- Moving a mortgaged property into an LLC
- Special cases
- Our perspective
- Ready to finance a property in your LLC?
- FAQ
- Sources
Can an LLC get a mortgage?
It can, if the loan program allows entity borrowers. The program matters more than the LLC.
Fannie Mae’s Selling Guide says it purchases or securitizes mortgages made to natural persons, with only a few exceptions: inter vivos revocable trusts, HomeStyle Renovation mortgages, and land trusts in certain states. An LLC is not on that list. So if you want a loan that stays in the LLC’s name, you look to lenders who write business-purpose loans on their own programs.
That is where we work. We are a lender that specializes in non-QM and alternative-income financing for investors and self-employed borrowers, and our DSCR program is designed for borrowers who buy through an LLC.
What an LLC mortgage actually is
People use “LLC mortgage” for a few different situations:
- Buying a rental in the LLC’s name. The LLC is the borrower and owns the property from day one.
- Refinancing a property the LLC already owns. The loan pays off existing debt, and may return cash.
- Moving a financed property into an LLC. You already own the property personally and want to transfer it.
Each has different rules, and we take them in turn below.
Why investors buy in an LLC
Most investors choose an LLC for three reasons: separating the property from personal assets, keeping ownership records tidy, and running several rentals through one structure. Whether an LLC is right for your situation, including liability and tax effects, is a question for your attorney and CPA. What we can tell you is how the financing side works so those professionals can structure the purchase around a loan that will close.
The practical point: if you decide to hold property in an LLC, line up the financing before you close. Buying first and finding a loan afterward is how investors end up having to deed property back out of the entity.
Loan programs that work for LLC borrowers
| Program | How you qualify | Who it fits |
|---|---|---|
| DSCR loan | The property’s rental income, not your personal income | Investors buying or refinancing rentals, including through an LLC |
| Non-owner-occupied bank statement loan | 12 to 24 months of bank deposits | Self-employed investors whose tax returns understate income |
| NONI loan | Designed for borrowers with no documentable income | Foreign nationals and non-traditional borrowers |
| Bridge loan | Short-term financing based on the deal | Acquisitions that need speed before longer-term financing |
| Commercial real estate loan | Property and borrower profile | Larger or mixed-use holdings |
All of these are business-purpose, investment-property programs. Programs available in your state and the exact terms are confirmed at application.
How a DSCR loan works for an LLC
DSCR stands for debt service coverage ratio. In plain terms, it asks whether the property’s rent covers the property’s monthly debt payments. A ratio of 1.0 means rent equals the payment. Lenders generally prefer to see rent at or above the payment.
A simple illustration, with made-up numbers: if a rental brings in $2,400 a month and the full monthly housing payment (principal, interest, taxes, insurance, and any HOA dues) is $2,000, the ratio is 1.2. The numbers here are for illustration only and are not an offer.
Why this suits LLC borrowers:
- The property qualifies, not your paycheck. Your personal income is not part of the equation, so a self-employed owner with heavy write-offs is not penalized.
- It works for LLCs. The loan can close in the entity’s name.
- No limit on financed properties. You can keep scaling a portfolio.
- Investment property only. DSCR is for non-owner-occupied property. It is never an option for a primary residence.
Our minimum credit score for DSCR is 640. Borrowers below that may be reviewed case by case, but 640 is the number to plan around. For the full checklist, see our DSCR loan qualification requirements guide, and you can test a deal’s numbers with the DSCR loan calculator. If you want to understand how rent is evaluated, our piece on property cash flow mortgage approval walks through it.
What you will need to provide
When the borrower is an LLC, the file has a business side and a personal side. Lenders typically ask for the LLC’s Articles of Organization and Operating Agreement, its EIN, proof it is in good standing, and bank statements or financial information, often with lease documentation for a rental.
A practical checklist:
- Articles of Organization filed with your state.
- Operating Agreement showing members, ownership percentages, and who has authority to sign. It also describes how the LLC runs, including member responsibilities and profit and loss distribution.
- EIN confirmation letter from the IRS.
- Certificate of good standing from the state where the LLC was formed.
- Lease or market rent information for the property.
- Entity bank account statements and, where applicable, proof of funds for the down payment and reserves.
- Government ID and credit authorization for each guarantor.
Two habits save time. First, make sure the Operating Agreement names the person who will sign the loan documents. Second, buy and pay through the LLC’s own bank account, so the money trail shows the entity, not you personally, funding the deal.
Down payment and credit
Down payment, reserves, and pricing depend on the property, the program, and the borrower’s profile, and they are set at application. We do not quote rates here, and nothing in this article is an offer or a commitment to lend.
Personal guarantees: what they mean
Putting the loan in an LLC does not always put the owner out of the picture. Lenders frequently ask the LLC’s owners to sign a personal guarantee, which works much like co-signing. The lender then reviews the guarantor’s personal credit and assets. If the loan defaults after a guarantee is signed, the creditor can foreclose and may pursue the guarantor for any deficiency.
Here is how to handle that well:
- Read the guarantee before signing and ask what it covers: full balance, or only certain events.
- Have your attorney review it alongside the Operating Agreement.
- Keep the LLC properly funded and its records separate from your personal accounts.
For a broader explanation of how guarantees work in business lending, this overview of what a personal guarantee means and what is at risk is a good companion read.
A related question we hear: can an LLC owner lose a personal home if the LLC is sued? The answer depends on your state’s law, how the LLC is run, and whether you signed a personal guarantee. That is a question for a business attorney in your state, not something a lender can answer for you.
Refinancing and cash-out on an LLC-owned property
This is where LLC owners most often get stuck, so it deserves care.
The conventional route: deed it out
Under Fannie Mae’s cash-out rules, at least one borrower must have been on title for six months before disbursement. Time the property was held by an LLC that the borrower majority-owns or controls may count toward that period, but ownership must be transferred out of the LLC and into the individual borrower’s name to close. The same page also says an existing first mortgage must be at least 12 months old, and a property listed for sale must be off the market on or before disbursement.
In other words, a conventional cash-out refinance on an LLC property means taking the property out of the LLC. Your attorney and title company should handle the deed, and you should ask them how the type of deed affects your title insurance.
The investor route: keep the LLC on title
A DSCR cash-out refinance can close directly in the LLC’s name. The property’s rental income drives the qualification, so you skip the deed-out and the personal income documentation that comes with a conventional loan. Our pages on DSCR cash-out refinance and DSCR cash-out refinance seasoning explain how equity is measured and how long you generally need to have owned the property.
Which route fits?
| Situation | Likely better fit |
|---|---|
| You want the property to stay in the LLC | DSCR cash-out refinance |
| Your personal tax returns do not reflect your real income | DSCR or non-owner bank statement program |
| You are comfortable owning the property personally | Conventional route, which requires the deed-out |
| You hold many properties and plan to keep adding | DSCR, which has no limit on financed properties |
Moving a mortgaged property into an LLC
If you already own a property with a mortgage and want to transfer it into an LLC, read your loan documents first. Most mortgages contain a due-on-sale clause, and a deed to an LLC can be treated as a transfer. As one example, a North Carolina law firm explains that deeding mortgaged property into an LLC may trigger that clause, letting the lender require payoff, refinancing, or another approved arrangement. State rules and transfer taxes differ, so talk to a real estate attorney and get any required lender consent before recording the deed.
Often the cleaner path is a refinance into a business-purpose loan that closes in the LLC’s name, which solves the question at the same time. Prepayment penalty availability and structure vary by state and are restricted in several, so if the loan you are paying off or the one you are taking has one, terms are confirmed at application.
Special cases
Self-employed investors. If your tax returns show low income because of write-offs, a non-owner-occupied bank statement loan uses 12 to 24 months of deposits to derive income. Our bank statement loan page explains the expense factors.
Foreign nationals. If you live abroad and want to buy U.S. investment property, see our foreign national loans page. A NONI loan may fit borrowers who cannot document income in the usual way.
Our perspective
We see the same pattern every month. An investor forms an LLC, finds a property, and then learns that the bank down the street will only lend to them personally.
That is not a failure of the investor or the structure. It is a mismatch between the loan and the borrower. Conventional agency loans were designed for individuals buying homes to live in. Investors who buy through entities need a program designed around the property.
That is why we put so much weight on DSCR. When the rent supports the payment, the file stands on the property, and the loan can close in the LLC’s name. Our loan officers handle each file personally, and we walk you through which program fits before you sign anything.
Our advice: decide on the financing path before you decide on the closing structure. Talk to your attorney and CPA about the LLC, and talk to us about the loan. Together, the pieces fit.
Christopher Arco, NMLS #1281
Ready to finance a property in your LLC?
We lend on investment property through DSCR, non-owner bank statement, NONI, bridge, and commercial programs. We are BBB A+ rated, and each file is handled by a dedicated loan officer, not a call center. Tell us about the property, the LLC, and your goal, and we will help you match it to the right program.
Start with our DSCR loans page or reach us through 1stnwm.com.
Bring your Articles of Organization, Operating Agreement, EIN letter, and the property’s lease or rent estimate, and the first conversation goes faster.
FAQ
Can an LLC get a mortgage?
Yes, when the loan program allows entity borrowers. Conventional loans sold to Fannie Mae go to individuals, so LLCs generally use business-purpose programs like DSCR. These are for investment property, not a primary residence.
Do I need a personal guarantee on an LLC mortgage?
Often, yes. Lenders frequently ask the owners to guarantee the loan and review their personal credit and assets. Whether a guarantee is required on your loan is confirmed at application, and your attorney should review it.
Can I use a DSCR loan in an LLC?
Yes. A DSCR loan qualifies the property on its rental income and can close in the LLC’s name, with no limit on the number of financed properties. It is for investment property only, with a 640 minimum credit score.
Can an LLC do a cash-out refinance?
Yes. A conventional cash-out requires moving title from the LLC to you personally. A DSCR cash-out can close in the LLC’s name. Seasoning and equity requirements depend on the program and are confirmed at application.
Can I move a mortgaged property into an LLC?
You can, but check for a due-on-sale clause first, and get any lender consent before recording the deed. An attorney in your state can confirm local transfer rules and costs.
Sources
- General Borrower Eligibility Requirements, Fannie Mae Selling Guide
- Cash-Out Refinance Transactions, Fannie Mae Selling Guide
- Personal Liability for LLC Mortgages, Nolo
- Personal Guarantee: What It Means and What Is at Risk
- Deeding a mortgaged property into an LLC in North Carolina, Pierce Law
For illustration only. Not a commitment to lend. NMLS #1281. Equal Housing Lender.