Can I take out a loan to help buy real estate inside of my Self-Directed retirement account?

All loans in an IRA and Solo 401(k) must be non-recourse or hard money, including real estate.

Rocket Dollar retirement accounts can use loans to help finance the purchase of real estate investments. All loans used must be Non-Recourse, and be made to the retirement plan or IRA, with no personal consideration or affiliation. 

Non-Recourse Loans are solely collateralized by the property, with no outside assets considered in a default situation. This means that, unlike usual loans, the lender cannot pursue any of your personal assets...in Non-Recourse Loans, the lender can only go after the real assets underlying the loan. Non Recourse loans have no personal guarantees outside of the property itself.

What if I have a Direct Custody account?

Customers with a Direct Custody IRA who are interested in investing in real estate but need help financing the purchase can contact the following Non-Recourse lenders.

• First Utah Bank,
  • David Heaps Loan Officer
  • Mortgage Department
  • NMLS #: 291194
  • Cell: (801) 550-4090
• NASB--North American Savings Bank
  
  • Contacts: Jason Zook
  • 10950 El Monte, Suite 210, Overland Park, KS 66211
  • Phone: 913-327-2042 Toll-Free: 866-735-6272  Fax: 913-327-4042
  • Matt Allen Email: mallen@nasb.com
  • 10950 El Monte, Suite 210, Overland Park, KS 66211
  • Phone: 913-327-2041 Toll Free: 866-735-6272 Fax: 913-327-4041
• VP First Western Federal Savings Bank
  • Email: roger@myiralender.com
  • Phone: 800-908-8845
  • Local Phone: 605-341-1203
  • Fax: 605-394-0084 or 800-817-0802

Please note...

1. Because of this unique structure, lending rates and terms will differ from traditional mortgage loan market rates. Traditional lenders might not be familiar with or offer the type of loan required.
2. IRAs using loans to purchase real estate can trigger UDFI (Unrelated Debt-Financed Income), requiring UBIT (Unrelated Business Income Tax) to be paid by your retirement account. You can click here to learn more.
3. Please consult your tax advisor to discuss the tax implications of using outside financing alongside your IRA.
4. More notes on UBIT & UDFI can be found here.

If you're interested in learning more, we have a number of partners who specialize in this space and can help explore your options, please call 1-855-762-5383, or email our sales and partnerships team at info@rocketdollar.com. 

Want to read more?

• See why nonrecourse loans make sense for investors
• Borrowing from your Rocket Dollar Self-Directed Solo 401(k)
• A general overview of investing in real estate

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