FHA Loan being called due for quitclaiming the deed?

[Blake Elder]

I was just talking with a commercial lender about some qualifications for purchasing a commercial investment. He mentioned offhand that he has seen a few times with smaller properties that have an FHA loan, where the owner quitclaims the deed over to an LLC, and this triggers the due on sale clause in the loan. Have you guys ever experienced this or heard about it? I have a quitclaim deed drawn up right now and am waiting to sign it to transfer the deed out of my name and into the LLC. What are your thoughts, experiences and opinions on this?

[Wayne Brooks]

You will absolutely not get pe mission for the transfer, as FHA only lends to individual, owner occupants. The transferring to Ann LLC is a violation of the due on sale clause on all FHA and conventional loans. If they catch it or not is the issue. They usually catch you when you change/add the name on the insurance policy, which you'll need to do to be covered.