Refinancing a Hard Money loan into a long term mortgage. Problem

[Laurent Feral]

Hi y'all!

I have a roadblock with refinancing .

I want to sell a Fix & Flip house with owner finance, in Dallas Fort Worth , TX. 

The house is in my LLC, and currently being rehabbed. Funding for the rehab comes 70 % from a hard money loan (at 12% interest rate) and 30% from my own equity.

To be able to sell the house with Owner finance, I need to refinance the hard money loan (6 months maximum) with a long term mortgage, at a decent  rate.

All mortgage lenders that I talk to will lend only to a person, not to a LLC. And with various refinancing ratios, ( max of 75% of Appraised value, minimum holding of 6 months prior to refinancing , etc..) Which means that I have to buy the house from the LLC, get a mortgage and then resell the house with Owner Finance. Which is expensive (transaction costs) , tax inefficient and does not change the collateral, (still the house).

How can this be done ? any idea?

Thanks

[Stephanie P.]

@Laurent Feral

If you get a loan and then try to sell the property using owner financing, you will trigger the due on sale clause.  Owner financing is typically only available on free and clear houses unless the original loan is assumed.

I could be wrong, but don't think I am.

Stephanie