VA LOAN to LLC or not?

[Dani Sounthone]

Can a VA LOAN be moved under an LLC or how would you go about getting your assets protected another way?

[KC Pake]

Quote from @Dani Sounthone:

Can a VA LOAN be moved under an LLC or how would you go about getting your assets protected another way?

Hi Dani,

When it comes to using a VA loan (Veterans Affairs loan) for real estate and the possibility of transferring it to a Limited Liability Company (LLC), there are several important considerations:

Loan Transfer Restrictions: VA loans are personal loans guaranteed by the U.S. Department of Veterans Affairs and are intended for the personal use of veterans, service members, and their families. These loans typically have restrictions that prevent them from being transferred to an LLC or other business entity. The primary purpose is to assist eligible veterans in purchasing, building, repairing, retaining, or adapting a home for personal occupancy.

Asset Protection Strategies: If your goal is to protect your assets, there are other strategies you might consider:

Insurance: Obtaining adequate insurance coverage, like homeowner's insurance and umbrella policies (as @Greg Scott mentioned), can provide a layer of protection against liabilities.

Homestead Exemption: Some states offer a homestead exemption that can protect a portion of your home's value from creditors.

Trusts: In some cases, placing the property in a trust can provide asset protection, although this can be complex and requires legal expertise.

Legal and Financial Advice: It's crucial to seek advice from legal and financial experts. Real estate laws, tax implications, and asset protection strategies can be complex and vary significantly based on your situation and jurisdiction.

Alternatives to Transferring to an LLC: If you're interested in investing in real estate through an LLC, you might consider purchasing additional properties directly through the LLC instead of transferring a property acquired with a VA loan. This approach can keep your personal and business assets separate.

Review of VA Loan Terms: Before making any decisions, review the terms of your VA loan. Any attempt to transfer the property without understanding these terms could result in complications, including the acceleration of your loan repayment.

In conclusion, while transferring a VA loan to an LLC for asset protection is generally not feasible, there are several strategies you can explore.

All the best,
KC