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At SouthStar Bank, there is no minimum or maximum loan amount. Your loan is in the name of your IRA, and the amount you borrow depends on the value of your real estate investment.
Single-family homes and condominiums (2-4 unit) are eligible for non-recourse IRA loans with SouthStar Bank. Keep in mind, the property must generate sufficient net operating income/cash flow that exceeds debt payments.
Eligible borrowers will need to have a portion of the purchase price vested in a self-directed IRA. The actual down payment for your non-recourse IRA loan will depend on the property you purchase, condition, and expected cash flow. SouthStar Bank typically requires a minimum down payment of 40%.
SouthStar Bank offers competitive interest rates on self-directed IRA loans. You’ll find adjustable rates to meet your investment needs. If you’re worried about how your credit score will affect your application on an IRA loan, relax.
Unlike traditional loans, you can qualify for an IRA loan, even if your credit score isn’t perfect. How is this possible? Simple. Your credit isn’t a determining factor because the loan isn’t made in your name. Instead, it’s made in the name of your self-directed IRA.
One of the best features of a self-directed IRA loan with SouthStar Bank is that it is considered non-recourse, meaning your remaining assets aren’t at risk. The loan is made directly to the IRA, not to you as the account holder. Your credit history isn’t a factor, yet you’re still able to purchase an income-producing property.
A non-recourse IRA loan lets you invest in real estate without jeopardizing your finances. If you default on your loan, you’re not personally responsible for repaying the loan. And, the remaining IRA funds and other assets you own are protected.
If you don’t already have a self-directed IRA, you can open one or transfer an IRA into a self-directed IRA. When you convert a standard brokerage-managed IRA to a self-directed IRA account, you open the door to a more diverse range of investing options. You also can grow your retirement fund by getting higher returns through investing in real estate.
At SouthStar Bank, we match you with lending terms that fit your finances. We offer adjustable-rate lending based on a 30-year term, and you’ll never have to worry about a prepayment penalty. This is your loan, and you can repay the funds when it makes sense for your finances.
Best of all, the lending team will never ask you to settle for a one-size-fits-all solution like other banks. To guide you toward the right lending solution to meet your financial needs, we want to get to know you. Contact SouthStar Bank’s IRA Loan Specialist to discuss your options.
Gary Mobbs
Senior Vice President/Area Manager/IRA Loan Director
830.672.1081 | 830.857.1418
gary.mobbs@testingforwebs.com
NMLS# 586586
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You’ll need a self-directed IRA account to get started. If you don’t already have a self-directed IRA, opening an account or converting an existing brokerage-managed IRA to a self-directed IRA account is simple. An IRA custodian can walk you through the process.
When you apply for the loan, it’s made directly to the IRA (not to you). IRS rules prohibit the use of IRA loan funds for certain investments, such as life insurance or collectibles. But you can use non-recourse IRA loan proceeds to purchase income-producing investment property. Profits are reinvested in the IRA, while remaining IRA account funds and other assets owned by the account holder are protected in the event of a real estate loan default.
While traditional and Roth IRAs are an excellent way to help you save for the future, your investment options are often limited to stocks, CDs, bonds, and mutual funds. A self-directed IRA is different. Rather than restricting you to traditional investments, a self-directed IRA allows you to expand your options to real estate, joint ventures, tax lien certificates, and more.
With a self-directed IRA, you have the freedom to explore these alternative investments and the chance to grow your retirement portfolio – without taking unnecessary risk. The investments you purchase with loan proceeds can produce the income needed to reach your retirement savings goals.
In addition to increased portfolio diversification, using a self-directed IRA to purchase real estate can make sense for your personal situation when you consider that:
When you borrow against your IRA, it is considered a non-recourse loan. This means you are not personally liable should you default on the loan. The only “recourse” the lender may use to collect on the default is the collateral. While you could lose your collateral, your remaining assets are protected.
Gary Mobbs
Senior Vice President/Area Manager/IRA Loan Director
830.672.1081 | 830.857.1418
gary.mobbs@testingforwebs.com
NMLS# 586586
