Non Recourse Loans- When Your IRA Isn't Enough
A couple months ago I discussed buying real estate using a self directed retirement account, but what typically happens and where do you turn if you need more money than your retirement asset has in it?
There is probably no better known lender in this niche than North American Savings Bank. NASB is located in the Midwest but does lend nationwide. They provide what is known as a non recourse loan-- you can check out the North American Savings Bank's website for their frequently asked questions. One of the big questions I hear is – what kind of property is eligible? NASB outlines the following property types: Single family detached residential, warrantable Condo’s, PUD’s, duplexes, 4-plexes, and multi-family (5 or more units).
Remember that property purchased and owned by your self directed IRA is investment property and cannot be utilized as your primary residence. Raw land is not eligible for a non recourse loan. The NASB folks also have a blog but do not post regularly. It is worth checking out though, and it is the perfect forum for specific question and answer sessions.
Another great resource for learning about and obtaining non recourse loans is based in Western Washington -- Pacific Crest Savings Bank. Finding banks that are knowledgeable about and do nonrecourse loans regularly are hard to find, but can make your investment efforts far more lucrative and successful.
Need to refresh yourself on self directed IRA's? Check out my self directed IRA blog for a refresher.