Who Qualifies for an IRA Property Loan?

Free and clear. The property must have no existing mortgage or lien. This is the most fundamental requirement. If your IRA already has a loan on the property, you'll need to pay it off before taking a new one (or refinance, which is rare in the non-recourse IRA space).

Single-family home. Most non-recourse IRA lenders focus on single-family residential properties. They're the easiest to value, insure, and liquidate if needed. Some lenders will consider small multifamily (2-4 units), but SFH is the standard.

Good condition. The property should be habitable and in reasonable condition. Deferred maintenance, structural issues, or environmental problems can disqualify a property or reduce the available loan amount. The lender will typically require an appraisal or valuation.

Location. The property should be in a market with reasonable liquidity. Properties in very rural areas, declining markets, or areas with limited comparable sales may not qualify.

Self-directed IRA or solo 401(k). The property must be held in a self-directed retirement account that allows real estate investments. Standard IRAs at Fidelity, Vanguard, or Schwab don't support real property.

Common custodians for self-directed IRAs include Equity Trust, Advanta IRA, IRAR Trust, NuView, and Millennium Trust. If your property is held in an IRA-owned LLC (sometimes called a "checkbook IRA"), the loan structure may differ slightly.

Reserve requirement. Your IRA needs liquid reserves beyond the loan proceeds. Typically, lenders require 6-12 months of loan payments in cash or equivalents within the IRA. This protects against vacancy, maintenance issues, or temporary cash flow gaps.

For example, if monthly loan payments are $1,500, you'd generally need $9,000-$18,000 in liquid IRA reserves in addition to the loan proceeds.

While every lender is different, here are the general parameters for non-recourse IRA property loans:

• Maximum LTV: 50% of appraised value. If your property appraises at $400,000, the maximum loan is generally $200,000.
• Minimum loan amount: Varies by lender. Some set minimums at $50,000 or $75,000.
• Interest rate: Typically 9-12%, reflecting the non-recourse risk.
• Origination fees: 2-3 points (2-3% of loan amount).
• Term: 3-5 year balloon with 25-30 year amortization schedule.
• Prepayment: Most allow early repayment without penalty, but confirm in writing.

Common reasons applications don't move forward:

• Existing debt on the property. The property must be free and clear.
• Non-residential property type. Raw land, mobile homes on leased land, commercial properties, and specialty properties are typically excluded.
• Insufficient reserves. If your IRA doesn't have enough liquid assets to cover 6-12 months of payments, the loan may not be approved.
• Title issues. The property must have clear title held by the IRA or IRA-owned LLC. Title defects, boundary disputes, or unclear ownership chains need to be resolved first.
• Property condition. Significant structural issues, deferred maintenance, or environmental contamination can disqualify a property.
• Prohibited transaction risk. If the loan structure could create a prohibited transaction (for example, if you personally use or benefit from the property), the loan can't proceed.

If your IRA holds a free-and-clear single-family property and you're interested in accessing equity without selling, the fastest way to find out if you qualify is to tell us about your situation.

We'll review the basics: property type, approximate value, your IRA structure, and what you're looking to accomplish. If it's a fit, we'll walk you through the process. If it's not, we'll tell you why and suggest alternatives if they exist.

No obligation. No pressure. Just a clear answer.