Challenges Purchasing Property with an LLC Holding Titles?

[James Marshall]

Hello - Has anybody recently encountered a challenge to find traditional lenders who will permit you to purchase an investment property through an LLC without steep premiums? In this situation, the mortgage is based off off my personal credit, but I will hopefully hold the title in an LLC I've formed for this property.

Current Findings: I've asked five lenders locally (CT and NYC) of varying sizes and was told by 4/5 that they "don't allow LLC's to hold title anymore." US Bank, for example, won't sell residential mortgage products to an owner holding title in an LLC. When final found a local bank that would allow my LLC to hold the title, it comes at a steep premium to market rates: 30% down payment + 5.25-6% APR for a 30-year fixed mortgage.

The last lender I spoke with said that the industry has changed in the last 3-5 years to not so easily put residential mortgage products in the hands of investors. He said that most banks won't allow LLC's to hold title because there is complexity if foreclosure is needed.

Any advice or thoughts would be much appreciated!

Thanks!

James