Can a DSCR loan close in an LLC?
Yes. LLC closings are standard for DSCR loans. Single-member and multi-member LLCs both work, with personal guarantees from the members.
Closing a DSCR loan in an LLC is the standard structure. Most investors prefer this over personal-name closing for liability protection and tax flexibility. Single-member LLCs (SMLLC) are the most common; multi-member LLCs work too with personal guarantees from each member with 25%+ ownership. The lender requires: (1) the LLC operating agreement showing ownership; (2) the LLC certificate of formation / articles of organization; (3) certificate of good standing if the LLC is more than ~1 year old; (4) personal guarantees from members at the 25%+ ownership threshold; (5) sometimes a resolution authorizing the LLC to incur the debt. Series LLCs (DE, NV, TX) work but need extra documentation. Newly-formed LLCs (less than 30 days old) are accepted by most lenders if formation documents are complete. Foreign LLCs are fine but the property must be registered as a foreign LLC operating in the state where the property is located (typical $200-500 fee).
People also ask
Should I form a new LLC for each property?
It depends on your liability strategy. One LLC per property maximizes liability protection but multiplies registration and tax filing overhead. Series LLCs (in supporting states) achieve similar isolation with one master LLC.
Can a trust own the LLC that owns the property?
Yes for many programs. The trust documentation is reviewed at underwriting; revocable living trusts and family limited partnerships work in most cases.
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