Solo 401k Non-recourse loan criteria
Generally if the provider of a Solo 401k non-recourse loan is a bank, the bank will require that the Solo 401k put up a specific percentage of the total real estate purchase.
If the investment is a rental property, the Self-Directed Solo 401k with a least 30%-40% of the purchase price will qualify for a non-recourse loan from a bank that specializes in this type of loan.
-If the the investment is a single family home, generally 30-35% of Solo 401k funds are required.
-If the the investment is 2-4 units, generally 40% of Solo 401k funds are required.
-If the the investment is condominium, generally 40% of Solo 401k funds are required.
-If the the investment is multifamily, generally 40% of Solo 401k funds are required.
Typical Loan Terms Available from Banks Specializing in Solo 401k Non-recourse Loans
-5year ARM
-10 year fixed
-20 year fixed
-25 year fixed
-$50,000 to $55,000 minimum loan amount is the common figure.
Closing a Solo 401k real estate transaction when a non-recourse loan is incorporated
-Average closing time-frame is 30 days with a non-recourse loan.
-Unlike a self-directed IRA where the custodian signs the non-recourse loan documents, the Solo 401k trustee signs the documents and thus generally takes 1 to 2 days.
Additional Information
Solo 401k Real Estate
Tenants in common (TIC) Scenario
If the investment is a rental property, the Self-Directed Solo 401k with a least 30%-40% of the purchase price will qualify for a non-recourse loan from a bank that specializes in this type of loan.
-If the the investment is a single family home, generally 30-35% of Solo 401k funds are required.
-If the the investment is 2-4 units, generally 40% of Solo 401k funds are required.
-If the the investment is condominium, generally 40% of Solo 401k funds are required.
-If the the investment is multifamily, generally 40% of Solo 401k funds are required.
Typical Loan Terms Available from Banks Specializing in Solo 401k Non-recourse Loans
-5year ARM
-10 year fixed
-20 year fixed
-25 year fixed
-$50,000 to $55,000 minimum loan amount is the common figure.
Closing a Solo 401k real estate transaction when a non-recourse loan is incorporated
-Average closing time-frame is 30 days with a non-recourse loan.
-Unlike a self-directed IRA where the custodian signs the non-recourse loan documents, the Solo 401k trustee signs the documents and thus generally takes 1 to 2 days.
Additional Information
Solo 401k Real Estate
Tenants in common (TIC) Scenario