LLC-Owned Rental Property Refinance with Agency Debt?

[Mike L.]

Hi all!

Love this site and the members!

Question: My friends and I bought a rental house 3 years ago and it's going fine. We want to refinance into a 30 year fixed note. Is this possible?

I'm told that we can't get agency debt on a property owned by an LLC. We have a lender that has advised us to switch the title to one of the LLC member's individual name, get agency debt (30 years, 3.25%), and then switch title back to the LLC after one day. He said technically their is a due-on-sale clause but they are never activated(he also mentioned that a year ago the rules changed in favor of doing this method).

I guess my biggest question is, is this unethical? I want to be above reproach in all that I do. 

Any thoughts?

Thank you,

Mike