Hard Money to FHA primary - issue with State of TX

[Melissa Smith]

Hi there,

I have a hard-money loan in Texas under my LLC. The intent was to convert this loan to an FHA and use this property as my primary residence once rehabs complete. I don't qualify for conventional due to a foreclosure 3 years ago. The foreclosure just hit the three year mark and the property was not inhabitable at the time of the hard money. The property has been completely rehabbed.

The problem is with the State of Texas, per my lender.

1. My new lender (RocketMortgage) approved the FHA as a purchase , for this property into my individual name. Note, current deed is in my LLC.

2. Title and underwriting approved this as a "purchase".

3. Per my lender, the State of Texas denied this transaction as they deem it a "business to client" transaction.

I just want to pay off the hard-money loan, nothing else, nothing more, and claim this property as my primary and move in. Anyone ever heard of this? The state denying an FHA loan/transaction?

House appraises for double than the loan payoff and new loan amount, so plenty of equity in the home.

Thanks for the help,

Melissa

[Josh Caldwell]

I am pretty creative. Ask them what happens if you drop it into a trust first. In general, the LLC to trust is NOT a transfer for the banking industry but it might be for TX, I am not sure here. Then you can either get a loan in the trust name or transfer again into your name.