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Can my IRA borrow money to make an investment? For example, can my IRA make a down payment on some rental property and obtain a mortgage for the balance of the purchase price?

April 26, 2017borrow down payment Investment IRA money obtain Property rental

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Can my IRA borrow money to make an investment? For example, can my IRA make a down payment on some rental property and obtain a mortgage for the balance of the purchase price?

1 Answer

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Yes. However, the loan must be a non-recourse loan. You cannot guarantee the loan and you cannot secure the loan with other IRA assets. Non-recourse lenders generally will only make loans for income producing property and also require a substantial down payment.