IRA Owned Real Estate with non recourse loan

[Roger Brownell]

My Self Directed IRA is purchasing an LLC from another unrelated (non-disqualified) seller, and the LLC holds a single real estate property ( a condo.) There is a loan on the condo, and the seller is personally responsible for the loan. The bank (holder of the mortgage) is fine with having the condo sold and will not exercise the due on sale clause of the note as long as payments are current. The Self Directed IRA Trustee is fine with me purchasing the condo with a loan on it since there is no recourse against the IRA itself. The bank will not, however, make the loan a non recourse loan, and will still require the seller to personally guarantee the loan. Therefore, the seller wants me to execute an assignment of rents and leases on other properties I have so that he will be secure in case something goes wrong with the loan in the future. Does exercising the assignment of rents and leases on a different property affect the law requiring that the condo the Self Directed IRA is purchasing being non recourse? I hope that is a clear question. Thank you for input. Rog

[Dmitriy Fomichenko]

@Roger Brownell

you may not pledge any of your personal or retirement assets as a security for this loan, that would be violation of IRS rules.