I don’t have enough money in my IRA to purchase a piece of property outright. Can my Self-Directed IRA or 401K get a loan and use my IRA money as the down payment?
Yes you can use your IRA money as the down payment and then have your Self-Directed IRA or 401K get a loan for the balance. However, you will not be able to personally guarantee the loan. It must be a non-recourse type of loan which means that if your IRA fails to make payments, the only recourse the lender has is against the property itself. Further, there will be tax ramifications to doing so; UDFI (unrelated debt financed income) tax applies when a loan is obtained so you would want to confer with your tax professional about what forms would be necessary.
Related Questions
- I don’t have enough money in my IRA to purchase a piece of property outright. Can my Self-Directed Retirement Solutions, LLC get a loan and use my IRA money as the down payment?
- I don’t have enough money in my IRA to purchase a piece of property outright. Can my Self-Directed IRA or 401K get a loan and use my IRA money as the down payment?
- My IRA does not have enough money to purchase a piece of property outright. Can my Self-Directed IRA get a loan and use my IRA money as the down payment?
