TEXAS LLC INVESTOR MORTGAGE LENDERS
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Closing in the name of a TEXAS LLC is not allowed by Fannie Mae or Freddie Mac for conventional TEXAS mortgages. For the last 4-5 years, essentially all conventional TEXAS mortgage loans must meet Fannie Mae or Freddie Mac guidelines. Prior to that, Alt-A loans were available. Very few banks today are willing to do a portfolio loan. |
TEXAS LLC MORTGAGE LENDERS SUMMARY
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In general, different TEXAS banks and other TEXAS mortgage lenders have different guidelines about TEXAS LLC loans and other TEXAS business entities going onto the title of the house. A TEXAS LLC or Trust is allowed by most banks whereas other forms of organizations such as corporations, s-corps, and non-profits are slightly less welcome by TEXAS mortgage lenders in general.
The good news is that it is not very much harder to get a loan for a TEXAS LLC than it is to get a loan as if you were each going on the loan as individuals. In fact, at most TEXAS mortgage lenders it’s identical. Keep in mind that some TEXAS mortgage lenders don’t even do them, but the ones that do will have a process that’s similar to most TEXAS mortgage lenders including:
In most cases, the credit, income, and assets of all members of the LLC will be used to qualify for a TEXAS mortgage using an LLC. The loan will be underwritten just as if you and your friend are buying a house together as individuals. Depending on the TEXAS mortgage lenders that funds the loan you will either show up as an individual on the loan, or simply as a guarantor. As an individual, it will be on your credit, and as a guarantor is USUALLY isn’t (keep in mind, different TEXAS mortgage lenders have different credit bureau reporting guidelines, you should check with each individual TEXAS mortgage lenders.
So depending on what your goal is, the TEXAS LLC may or may not make sense. You can accomplish the same goal financing it as an individual. If your goal is simply the most favorable TEXAS mortgage terms, buying a property in a Texas LLC will not help you get better terms then purchasing in your own name. If you have tax-related goals or other goals, it’s best to check with TEXAS mortgage lenders to find out what LLC loan options are available based on your credit and down payment to purchase.
Sometimes TEXAS mortgage lenders will allow an LLC to use credit that has already been established. Usually, this doesn’t apply here as it seems your TEXAS LLC is not yet formed. At any rate, if a TEXAS LLC, Corporation, and has credit and assets of it’s own, some TEXAS mortgage lenders will take that into account when rating your loan.
Remember that when you purchase in a TEXAS LLC will be treated as a “ non-owner occupied mortgage loan,” unless you can supply valid documentation that all members of the TEXAS LLC have lived together in the past and are going to continue to live together in the future. Again, you’re just as well off to do it as individuals in that case. At any rate, TEXAS mortgage lenders consider non-owner occupied mortgage loan transactions to be more risky (because they are in general), and so all but one investor requires a down payment, and the interest rates are higher.
To summarize, forming an TEXAS LLC for mortgage purposes will only benefit you inasmuch as it has the potential to keep a ton of properties off your personal credit report IF you can find a TEXAS mortgage lender that doesn’t report the loan on your personal credit. Other than that, any benefits would be legal or tax related. In that case, you should also ask your attorney or accountant about the comparative benefits of trusts, corporations, and LLPs.
WHAT IS A TEXAS LLC?
TEXAS limited liability companies alsl know as an LLC in TEXAS form of a private limited company. It is a TEXAS business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. An LLC is not a corporation; it is a legal form of a TEXAS company that provides limited liability to its owners in many jurisdictions. TEXAS LLCs do not need to be organized for profit. In TEXAS businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but may be required to form a very similar entity called a professional TEXAS limited liability company.
