Using Self-Directed IRA in a Defficiency Judgment State

[Rick Garrido]

Hi, All,

I'm considering purchasing a property in Ohio using my self-directed IRA for the downpayment. However, I'm being told by the account custodian that loans on a self-directed must be Non-Recourse loans. Since Ohio is a deficiency judgment state, I don't believe lenders would be willing to waive the right to obtain judgments against the borrower in the event a foreclosure sale doesn't cover the full amount owed. Does anyone have any suggestions on how to get around this? Would appreciate the feedback.

[Rick Garrido]

Thank you all for the feedback. There's a lot to consider here. I'm checking in with our accountant and looking into lenders willing to provide a non-recourse. It occured to me though (and I'll be asking this as well), if I personally guarantee the loan outside of the IRA, or does that breach the personal-benefit requirements for self-directeds. Ideally, I'd love to finance this purchase with personal funds but I don't have enough for the downpayment outside of the IRA. This is all super fun though, figuring out the nuances to this game. :) I'll provide an update after it's all said and done as I think this is a great learning exercise for the BP community.