When you’re applying for a non-recourse loan, there’s a good chance you’ve already looked at our online application (if not, view it here). The application itself can seem pretty detailed and even a bit complex, but we promise that our non-recourse lenders are here to help make everything a bit simpler and more transparent. There are a number of things that you need to include with your application, and in today’s blog, we’re going to break down all of the necessary documentation.
Much of this same documentation is applicable not only for a non-recourse loan, but also for refinancing and home equity loans as well. Take a look at some of the necessary documentation that’s required as part of your application, and contact our non-recourse lenders with any further questions you may have!
1. Purchase Agreement
You must include a purchase agreement with the correct vesting, or, ownership of your 401(k). Additionally, this purchase agreement must show your IRA custodian, LLC name, 401(k) name as the purchaser.
2. Current IRA Statements
Your current IRA statements should show the correct names, dates, and account numbers. If you’re part of an LLC structure, you’ll need to include copies of IRA LLC bank statements as well.
3. Letter From IRA Account Holder
You’ll need to write a letter explaining why you are applying for the loan, and providing adequate details of the overall loan request. Make sure you cover the following things in your letter:
- The type of property
- The location of the property (remember, all properties need to be in the United States)
How you plan on using the property
- Additionally, include what you’ll be renting it out for, and who will be renting it
- How much you’re requesting for the loan
- How your IRA will be involved
- Future investment goals for this specific property
- Your personal experience in investing in properties, as well as managing investment properties
4. Photo ID
Attach a picture or copy of a form of photo identification, such as a driver’s license or a passport.
5. Existing Lease Agreement (if possible)
If the property is currently leased (and you’re looking to take out a home equity loan or refinance your existing non-recourse loan), you need to include a copy of the existing lease agreement. If it’s not currently leased and you’re looking to acquire the property, you do not need to include this information.
6. 2-Year Financial Statements (if possible)
In the event that you’ve already been leasing out this property, include the most-recent two years of income and expense statements on this investment property. If the property has never been a rental, include pro-forma income statements and an expense summary.
7. Hazard Insurance
Include hazard insurance contact information in your necessary documentation. Important: the proposed property must be titled in the name of the IRA — if the insurance is in your personal name, it will not be accepted. Be sure to include (on our application) the name and phone number of your insurance agent’s name.
These are some of the basic things that must be included when you’re applying for a non-recourse loan. These forms of documentation are good to have ready and on hand if you’re applying for a home equity loan, or are looking into refinancing. By visiting our online application, you can get a better sense of some of the other documents we require for financial opportunities that are outside the realm of non-recourse loans. Get started with our non-recourse lenders today — and if you have any questions about your application, be sure to get in touch with our team!