Need advice on having title on LLC but mortage on individual name.

[Sachet Hegde]

I am buying a new construction for investment purpose and would like to have the title on my LLC. However, I would be taking an investment property mortgage(Not a commercial mortgage on LLC) with 25% down.

Lender is saying that they are selling the loan within 30 days and I need to transfer the deed if new lender agrees. I find it too expensive to do that after closing.

Does any lender accept this considering I am paying 25% down and it is an investment property mortgage already? Can I negotiate with my lender to have the title on the LLC while closing itself?

[Doug Smith]

It's not so much the amount you are putting down that might cause an issue, but the fact that most of these loans are "securitized", meaning sold off to large pools of loans on Wall Street called "traunches". These traunches, particularly since the 2007/2008 crash, have very stringent rules about what they will and won't allow in the traunche. If you watched the movie "The Big Short", you'll remember that during the last crash, rating agencies were blindly handing out ratings for Mortgage-Backed Securities that fund traunches of loans without checking what is actually being held in the traunche. They are much, much more stringent now and they make sure that nothing goes into the traunche that doesn't exactly match guidelines. Can you negotiate per your last question? Probably not. They have to match traunche guidelines exactly...that is out of their control. There are many programs, however, that are available where your LLC can be the borrower, so a transfer would not be necessary as it can be done in the name of the LLC at closing. Obviously, you're not doing one of those programs. Although the lender may not call the loan, transferring title after the loan has closed would trigger most due on sale clauses...should the lender decide to push it. Will they call it? Probably not, but it's a possibility. You're choices are to risk it with this loan program or do a loan program where the LLC can be the borrower and close it in the name of the LLC from the get-go.