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Loan Feature

Close your DSCR loan in your LLC

In short

DSCR loans routinely close in LLC name. This is the standard structure for rental property investors who want liability separation and clean tax accounting. The LLC is the borrower; member(s) with 20%+ ownership personally guarantee. Single-member, multi-member, series LLCs, and holding-co structures all work. Articles of organization and operating agreement are required at application.

Program highlights

  • Single-member LLC (disregarded entity for tax) - standard
  • Multi-member LLC (partnership taxation) - standard, all 20%+ members guarantee
  • Series LLC (TX, DE, IL, NV, OK, TN, AL, IN, VA) - accepted at most lenders
  • Holding-company structures (Holding LLC → Operating LLC → property) - accepted
  • No surcharge for LLC vesting at most lenders; some price it 0.125% better
  • Personal guarantee is required from owners holding 20%+ membership interest

Who this fits

  • You want liability separation between your rental and your personal assets
  • You have a tax strategy that uses LLC pass-through (or S-corp election in some cases)
  • You're building a portfolio and want consistent entity structure across properties
  • Your CPA / attorney recommended LLC vesting for your situation

How the process differs

At application, provide your articles of organization and operating agreement. If the LLC is freshly formed, also provide the EIN confirmation. The lender confirms the LLC is in good standing in its state of formation, verifies the members listed match the guarantors, and runs the loan in the LLC's name. Closing is at the title company with the LLC as borrower; you sign as authorized member.

What to watch for

  • Personal guarantees are non-negotiable on virtually all DSCR programs. Without them the loan moves to commercial pricing (much higher).
  • Multi-member LLCs: every 20%+ member personally guarantees. The lender prices the loan off the weakest credit profile.
  • LLCs formed in non-resident states (Wyoming, Delaware) work but add foreign-LLC registration cost in the property's state. Most investors form in the state where the property sits.
  • Operating agreement matters. Single-member LLC OAs are short (5-10 pages); multi-member OAs need to specify decision authority on the loan. Some lenders provide a template if you do not have one.
  • Switching title to LLC AFTER closing in personal name can trigger the due-on-sale clause. Always close in LLC name from the start if you plan to hold in LLC.

Frequently asked

Does my LLC need an EIN?+
Single-member LLC: not technically required for tax purposes (uses SSN as disregarded entity) but most lenders want one. Free from IRS, 10 minutes online.
My LLC is brand-new - is that a problem?+
No. Lenders accept LLCs as new as 30 days old. They want articles of organization showing the LLC exists in good standing.
Can I close in my LLC if the LLC has no track record?+
Yes. The LLC is the borrower, but the personal guarantor's credit and reserves are what get underwritten.
Are series LLCs accepted?+
Most lenders accept series LLCs in states that recognize them (TX, DE, IL, NV, OK, TN, AL, IN, VA). Cross-state series LLC enforcement is murky; some lenders require pure-form separate LLCs for properties in non-recognizing states.
What if my LLC has a partner with low credit?+
Multi-member LLC loans price off the weakest qualifying guarantor. If your partner is at 580 FICO, the loan may not qualify. Options: restructure so the high-FICO member is sole owner, or accept the rate hit.

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