IRA Non-Recourse Real Estate Loans

Are you looking to purchase real estate with your self directed retirement account? First National Bank of America offers IRA Non-Recourse Real Estate Loans.

Required Documentation

The following documents are required to apply for IRA Non-Recourse Real Estate Loans.  For more information on what First National Bank of America can offer, please contact Scott Raymond at 616-538-6017 or sraymond@fnba.com

  • Instruction form from Custodian / Administrator for purchase of real estate, if required
  • Copy of picture ID (front and back)
  • Most recent W-2 or 1st 2 pages of most recent tax return for IRA owner (signed)
  • If property is currently leased, a copy of the lease agreement
  • Current rent roll if property is a multi-family
  • Rental income and expense proforma
  • Insurance agent name and phone number
  • Real estate agent name and phone number
  • Title Company name and phone number
  • Copy of previous appraisal, if available
  • If an LLC will own the property, include the following data:
    1. Name of LLC
    2. Articles of Organization
    3. Tax ID #

Return All Documents to:

First National Bank of America
attn: Scott Raymond
4660 Kalamazoo Ave. SE
Grand Rapids, MI  49508

Non-Recourse IRA Real Estate Loan FAQs

What is a Non-Recourse loan?

The owner of the self-directed retirement account is not personally liable for the repayment of the loan. Simply said, the bank’s security is the property itself and there is no recourse against the owner of the self-directed retirement account. In the event of default, the property is the only source of repayment.

How can I apply for a Non-Recourse loan?

Complete a non-recourse loan application and return to First National Bank of America by email, fax, or mail.
Contact data is as follows:

Address: First National Bank of America attn: Scott Raymond 4660 Kalamazoo Ave. SE Grand Rapids, MI  49508

Phone: 616.538.6017

Fax: 616.827.8707

Email: sraymond@fnba.com

Who is eligible for a Non-Recourse loan?

Anyone who has the required 40% to 50% down payment and liquidity reserves available in their self-directed IRA. This is subject to underwriting approval, which will include satisfactory review of the subject appraisal and liquidity verification.

Can the subject properties be held in a LLC?

Yes. Please consult with your tax and/or legal advisor or self-directed retirement account administrator to set up the entity structure most applicable to your situation.

What is the processing time for a Non-Recourse loan?

Typical processing time is 30 to 45 days from application to close.

Is your program offered in all 50 states?

FNBA will finance 1 to 4 family homes in all 50 states. (subject to change from time to time) 5+ unit properties need to be located within the state of Michigan.

Can FNBA set up my Self-directed IRA?

No. You will need to select your own Custodian.

Is there an income requirement for my rental property?

Yes. The property must generate net operating income that exceeds debt payments by 20% to 25% based on either existing leases or projections based upon local rental comparables.

Do you require an escrow account for property taxes?

Yes. It will be included in your monthly payment.

What type of rental properties are eligible for FNBA’s program?

Single family residential, duplexes, triplexes, 4plexes, and multi-family.

What terms are available?

3, 5, 7, and 10 year balloons with up to 20 year amortizations are all available.

What fees and costs will I pay for a Non-Recourse loan?

  • 1 to 2% origination fee
  • $250 Underwriting fee
  • $500-2,000 attorney reviewed/prepared closing documents (due upon acceptance of the commitment)
  • Title insurance, pre-paid taxes & insurance, survey, appraisal, mortgage recording, and settlement fees which vary depending on your location and purchase specifics.

What information will I need to include along with my submission?

Please review the Required Documentation Checklist and FAQ.

What is the processing time for a Non-Recourse loan?

Typical processing time is 30 to 45 days from application to close.

Are there any liquidity requirements?

Yes, if the property is leased at the time of close the self-directed retirement account must have at least 6 months of Principal, Interest, Taxes, Insurance (PITI) payments in the account after the loan is closed. If the property is not leased at the time of close then there would need to be 12 months of PITI payments in the account after the loan is closed. This will lower to 6 months PITI payments when the property is leased.