Loan Transfer to an LLC

[Edward Burke]

I see many conflicting opinions on BiggerPockets regarding forming an LLC. Specifically, the merits of a umbrella policy vs LLC protection, etc. That's not what this question is. :)

Everyone always mentions the inability to transfer personal Fannie Mae loans to a LLC, and the risk of them being called due. However, I see the following on Fannie Mae's website:

Unless the previous borrower requests a release of liability, the servicer must process the following exempt transactions without reviewing or approving the terms of the transfer:

A transfer of the property to a limited liability company (LLC), provided that:

- the mortgage loan was purchased or securitized by Fannie Mae on or after June 1, 2016, and

- the LLC is controlled by the original borrower or the original borrower owns a majority interest in the LLC, and if the transfer results in a permitted change of occupancy type to an investment property, such change does not violate the security instrument (for example, the 12 month occupancy requirement for a principal residence).

Note: The servicer must notify the borrower that a property transferred to an LLC must be transferred back to a natural person prior to any subsequent refinance application in order to meet Fannie Mae’s Selling Guide underwriting requirements.

What am I missing?  I'm planning to transfer my loans to an LLC, and have an e-mail out to my lender.  Per the above statements, it seems like this shouldn't be an issue.

[Jake S.]

Not answering your question in anyway, but I am very curious of the same thing. If I own my LLC completely, why is it an issue to transfer the title to it?!