FHA in an LLC?

[Spencer Wetmore]

Hi Everybody!

I purchased a multifamily in June 2016 using an FHA loan. I did a little research and would love to create an LLC for this property (and possibly future properties). However, I heard from a non-attorney it is not allowed to put an FHA property into an LLC.

Can somebody substantiate this fact? I did a little digging, but couldn't find anything concrete.

Thanks so much,

Spencer

[Michael Koncaba]

In not a lawyer but am almost a CPA pending final certification paperwork. There are plenty of stipulations with the FHA that prohibit something like this. It may trigger a clause in your loan agreement and cause trouble. I would stay away from something like that uless you refinance to a conventional mortgage. Also you want to be very careful to not get too happy making LLCs. There are many arguments for an against it. Brandon Turner talked a little about this in more than one podcast and book. I'm not a lawyer and am fuzzy on many of the legal intricacies so dont take my advice here as gospel.

That being said, if its still your primary residence there wouldn't be any tax benefit. If its a rental it may subject you to more tax than just holding them in your name.