Transfer existing property to LLC to qualify for new mortgage

[Dennis Mcdonald]

Hello BP! I've been searching for the better part of 5 hours for this answer but am coming up empty, so here I am creating my first real BP thread.

Here's the situation I'm in. I own a condo that I intend to rent out. The market shows that $900-950 is the rent that I can get. I've had some interest already so I'm thinking that the numbers there are in-line with the market. At the same time, my family is looking to relocate to a rural area about 30 minutes away in an area that is applicable for the USDA Loan (0% down, low PMI, 3.5%). Whether I go this route or conventional financing @ 5% down, I've confirmed that the properties that we are looking to acquire are well within our means as far as PITI and cash flow on the condo; this has also been looked over and confirmed by a mortgage broker whos begun the search for a lender that will get us the best deal possible. Then we hit a snag (as all mortgage proceedings do)...

No lender is willing to credit us the rental income @ 75% because we don't have 30% equity in the property that we currently live in that we are going to rent out. Kinda of sucks but it is what it is.

What I'm wondering is if I can bypass all that and put the condo in an LLC so that it will just appear that I have a business income that covers a large portion of my debts (existing mortgage). So in short I QCD to the LLC and then when I got for the new mortgage, "I" don't own any property. Does this make sense, or will lenders be privy to these methods and simply say that I own a busniess with debt?

Any info is appreciated, thanks!