Have a DSCR loan where your investor client plans to close in an LLC? This guide can help!
With our DSCR Investor Solutions (1–4) loans, title may be vested in an LLC. Here are the required documents and helpful tips to keep things moving smoothly.
Required Documents:
- LLC Articles of Organization
- Evidence of Good Standing (Certificate of Good Standing or screenshot from the state website) for the state in which the entity was formed. Must be dated within 90 days of the note date.
- LLC documents authorizing the guarantor to execute loan documents on behalf of the entity (e.g., Operating Agreement, Certificate of Authorization).
- If the authorizing documents are not provided, a Certificate of Authorization/Borrowing Certificate for the members executing documents on behalf of the entity is required. Certificates are not required if authorization can be determined by reviewing the Operating Agreement or other corporate documents.
- Corporate documents listing members/managers and, if there is more than one member, the ownership percentage of each member (e.g., organization structure).
- EIN/Tax Identification Number
- Single-member LLCs may use EIN or the guarantor’s Social Security number
- All multi-member LLCs must have an EIN
Tips to Remember:
- Each LLC member must be on loan and sign a separate 1003 application as an individual.
- Changes in membership during loan process may require additional documentation. Contact your UW for advisement.
- LLCs are limited to a maximum of four members.
- LLCs whose members include other LLCs, corporations, partnerships, or trusts are ineligible
- At closing, separate Personal Guaranties must be provided by each LLC member.
- At closing, the authorized signer(s) for the LLC must sign:
- Note, Deed of Trust/Mortgage, Addenda and Riders
- Disclosures
- Settlement Statement
With over 25 years serving borrowers nationwide, Plaza Home Mortgage® is here to help get your DSCR loans LLC-ready. Connect with your Plaza AE for more information.
