A limited liability company, also known as an LLC, is a business structure that protects its owners from personal responsibility for its debts or other liabilities. 

An LLC is a formal partnership arrangement that requires articles of information to be filed with the state. Because LLC owners/investors are protected from personal responsibility for debts and liabilities, many people wonder an LLC is qualified to get a loan. 

Specifically, here we’re talking about an LLC getting a mortgage loan? So how about it, can an LLC get a mortgage? Keep reading to get the answer.

Today, we will share with you if an LLC can get a mortgage loan or not. 

Can An LLC Get A Mortgage?

Whether an LLC member can get a mortgage loan or not depends on a number of factors. Despite being protected from personal debts and other liabilities, an LLC member can still get a mortgage loan, which is a liability. However, what type of a mortgage loan an LLC member can get is limited. 

An LLC member getting a mortgage loan has its advantages and disadvantages. Right off the bat, you should know that an LLC member getting a mortgage loan is pretty difficult. 

Obstacles To An LLC Getting A Mortgage

The first disadvantage of getting a mortgage loan if you are an LLC member is that it will be more difficult compared to when you are not. Many mortgage lenders do not want to lend LLC members mortgage loans because of the limited liability it offers. 

Banks and lending institutions are aware of the advantage of being an LLC, which is being protected from personal debts and liabilities. And that can be bad for lending institutions. 

Many mortgage lenders only lend small LLC groups if the owner agrees to put up their own personal assets to pay the debt.

And in the event that you, an LLC member, get approved for a mortgage loan, you will possibly pay higher interest rates. 

Buying a property as an LLC indicates to mortgage lenders that you plan to purchase the property as an investment rather than a primary residence. And because mortgage lenders prioritize a first mortgage over investment properties in case of financial trouble, interest rates for investment properties are slightly higher. 

Although LLC members can get a mortgage loan from banks and private lending institutions, some government-sponsored mortgage loans restrict LLC members from getting a mortgage loan. Government-sponsored mortgage lenders such as the Federal Housing Administration (FHA), as well as conventional sold to Fannie Mae and Freddie Mac, do not approve LLC members of a mortgage loan.

Pros Of Getting A Mortgage As An LLC

Now, there are some advantages of getting a mortgage loan while being an LLC member. The biggest one is that you have limited liability and increased protection of your personal assets.

In conclusion, an LLC member can still get a mortgage loan. However many government-sponsored lenders do not lend to LLC members. 

So your best chance of getting a mortgage as an LLC is to go through a bank or other private lending institutions. But, even so, go in expecting that it will be difficult to get approved for a mortgage loan if you are an LLC. 

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