ForumsReal Estate InvestmentsNon-Recourse Loan Rules

Forums Solo 401k Real Estate Investments Non-Recourse Loan Rules

  • Non-Recourse Loan Rules

    Mark Nolan replied 2 years, 9 months ago 2 Members · 2 Posts
  • 1 Reply
  • Valerie C.

    Top SubjectSolo 401k Contributions,Solo 401k
    Top ForumsSolo 401k Contributions, Solo 401k

    Valerie C.

    Valerie C.

    Top SubjectSolo 401k Contributions,Solo 401k

    October 12, 2021 at 8:47 am

    I would like to know if there are specific rules (and where I find them) regarding non-recourse loans. I have an unrelated private investor who is willing to make a favorable non-recourse loan for an investment I intend to put into my Roth 401k. Is there an actual IRS requirement as to the LTV? I am buying the property for $160,0000 and it is worth $200,000 so there is 20% equity by virtue of the purchase price, if he is willing, can I invest only $10,000 and finance the rest?

    Valerie C.
  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    October 13, 2021 at 10:31 am

    If the solo 401k will invest in a property, the non-recourse loan would be to the solo 401k. The LTV is a requirement set by the bank not the solo 401k rules. As such, if the lender is a private investor not related to the solo 401k participant, the LTV can be set by the lender.

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