Real Estate Investor · Los Angeles, CA · Member since 2016 · 31 posts · 7 votes
I got approved for an increase in the disaster loan to my business (I'm self employed) by the Covid 19 Disaster Loan program. This is a 3.75% 30 year repayment loan to the business.
Because it was over a certain $$ amount, I needed to put a personal guarantee on the loan.
The loan is technically to the business and the business is responsible for paying back the loan. However, due to the size of the loan, I did have to sign a personal liability.
Will this loan affect my ability to get a personal mortgage for an investment property? Does Fannie count business SBA 7(b) loans on my personal liability for my debt ratio?
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
5y
@Neel P. for Fannie/Freddie they won't care about that loan. However, we have seen SOME commercial lenders care about that loan. So it might depend on the loan type and which lending company you use. So just get prequalified ahead of time. That way you know if you are good or not.
Lender · Peoria, AZ · Member since 2018 · 77 posts · 25 votes
5y
Hey @Neel P. So I had a loan I was helping a borrower with and the situation sounds similar. Lesson I learned is that I would not rely solely on the fact that you personally did not originate the loan because you did guarantee the loan and so you are personally still obligated to the debt. For my borrower, he had taken the loan out through the SBA because of covid and it was such a large debt that it not only had to be guarenteed by him but they did a lien on his home.
The debt can still be excluded a couple of ways and the most common for FNMA is if the business bank statements show that the business has paid for that debt for the last 12 months then it can be excluded. I would hate for you to get started, have them find the debt and you not be able to close because of it. Plus your application is signed indicating that the debts listed are all of your debts and the information is full an complete. Just make sure you have 12 bank statements from the business showing that you did not personally make a payment on that debt and you can get it excluded.