I have a loan with Freddie Mac that my servicer (US Bank) says I cannot transfer into an LLC without the Due on Sale clauses being enforced, even if I remain a personal guarantor on the loan.
My understanding, and have successfully done so in the past, is that Freddie Mac allows transfers to an LLC.
The reason they are saying I can’t transfer is because this is a rental property and not a primary residence.
Their written response:
“The purpose of this letter is to advise you that the Bank will not accelerate the loan upon this type of property transfer so long as:
You continue to reside in the home as the principal residence if owner occupancy is required by the Security Instrument”
Has anyone dealt with a bank servicing the loan not allow you to transfer it to an LLC if the investor is Freddie Mac?
FWIW I bought the house and lived in it for 5 years, then started renting it out.
Bank is saying I can’t transfer title to LLC for loan, even though Freddie Mac owns it?
byu/kermitt1991 inrealestateinvesting
Posted by kermitt1991
2 Comments
Why do you need the llc
I’ve worked several places doing loans and it’s hit or miss whether they allow it or not. Used to originate with FlagStar and renasant and they were a hard no. Then I originated with American Pacific and it was almost like they encouraged it.