The Quick Read: This loan can move a rental into an LLC in one step, because the new loan pays off the old personal lien and title is vested in the entity at closing, while qualifying runs on documented income under the applicable program, subject to lender guidelines.
- It fits non-owner-occupied rentals. An owner-occupied home generally stays in your personal name.
- On an investment property, cash-out on bank statement documentation tops out around 75% LTV (loan-to-value, the loan as a share of the property’s value).
- Loan sizes typically run from $125,000 to $3,500,000, with reserves commonly around 6 months of the housing payment.
- Expect to sign a personal guaranty even though the LLC is the borrower.
- Deeding the property into the LLC first, while the old mortgage is still in place, is the risky route. The refinance is the cleaner one.
Plenty of self-employed investors want their rentals inside an LLC. Plenty also own those rentals in their own names, with a mortgage that still has years to run. The usual instinct is to record a deed and sort out the loan later. That instinct causes most of the trouble in this topic, and the refinance exists partly to avoid it.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 29, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 29, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Key Terms Defined
Bank statement loan: A loan that is reviewed around deposits in your personal or business accounts instead of tax returns or W-2s.
Cash-out refinance: A new, larger loan that pays off the existing one and hands you the difference as cash.
Vesting: The legal name that holds title to the property. Here, vesting means the LLC.
Personal guaranty: Your written promise to repay the loan if the LLC does not.
Due-on-sale clause: A loan term that lets the lender demand full repayment if the property, or an interest in it, is transferred without the lender’s consent.
Expense factor: The percentage a lender subtracts from business deposits to estimate what is left as usable income.
Business-purpose loan: A loan made primarily for investment or commercial use rather than personal, family, or household use.
How Does This Refinance Actually Work?
It works like any cash-out refinance with one change: the income test. The lender reads your bank statements, strips out what is not income, averages the rest, and compares that figure with the new obligation and your other debts.
Programs in the wholesale network Lendmire works with are built around 12 months of personal or business statements. Some lenders in the wider market look at 24 months, as Scotsman Guide describes in its coverage of statement-based non-QM lending.
The underwriter removes deposits that are not earnings. Transfers between your own accounts and loan proceeds are typical examples. On business accounts, the lender then applies an expense factor, because business deposits are gross revenue.
Here is the part borrowers get wrong: you do not pick the expense factor. The program sets it, and some programs let a CPA-prepared figure replace the default. Across the lenders Lendmire places these files with, the factor varies, so treat any single percentage you read online as an example only.
These files are underwritten by hand. A person reads the statements, which is why a clean, consistent deposit history matters more than a big one. The loan then is reviewed on documented income under the applicable program, subject to lender guidelines.
Why Move the Loan Into an LLC at All?
An LLC separates the rental from your other assets for tenant claims and day-to-day operating liability. That is the main reason investors do it. Many also like to keep each property in its own entity as the portfolio grows.
The LLC does not remove your exposure to the lender, though. The lender will still want your personal guaranty. So the entity helps with outside claims, not with the loan itself.
Two Routes Into the LLC
The refinance route is cleaner than the deed-first route, because the old loan is paid off at the same moment title moves. Deeding first puts a transfer on top of a live mortgage, and that is where the due-on-sale risk comes from.
| Route | Order of steps | Existing lender | Who signs |
|---|---|---|---|
| Refinance into the entity | New loan pays off old lien; title vests in LLC at closing | Paid off, so no transfer on a live loan | LLC signs; you guarantee |
| Deed first, refinance later | Deed to LLC, then apply for the new loan | Transfer happens while the old loan is live | You, then LLC |
| Already in an LLC | Refinance in the LLC’s name | Same borrower, no transfer | LLC signs; you guarantee |
Federal law defines the due-on-sale clause as a term that lets the lender call the loan if the property or an interest in it is transferred without written consent. The law protects a short list of transfers on homes with fewer than five units.
Many lenders do not enforce the clause against a borrower’s own single-member LLC. Both that and the legal definition above are true. Low practical risk is still not zero risk. The lender holds a right, not an obligation, and staying current on payments does not waive that right.
A trust is treated differently. A transfer into a trust where you remain a beneficiary sits on the protected list for small residential properties. An LLC does not. So a trust is not interchangeable with an LLC here, and anyone who tells you a workaround is automatic is skipping the facts.
The refinance route still needs a lender willing to close the loan in the entity’s name. Not every lender will. That is one reason a broker that shops several wholesale lenders earns its keep on this kind of file.
Whose Income Gets Reviewed When the Borrower Is an LLC?
The guarantor’s. The LLC is the borrower on paper, but a new entity has no history to read, so the underwriter looks through it to you.
That raises a few practical questions:
- Which accounts count? Personal statements, business statements, or both, depending on where your income actually lands. A program may skip the expense factor on personal statements and apply it to business ones.
- Does the LLC’s own account help? A brand-new rental LLC has little deposit history. Rent deposits from the property are not the same as your qualifying income, so the file usually rests on your established accounts.
- What about co-owners? A multi-member LLC may require more than one guarantor, and each person’s ownership share can change how income is counted.
- What gets removed? Transfers between your accounts, loan proceeds, refunds, and one-time deposits. If your statements are full of these, qualifying income drops.
Bank statement qualifying is the right tool when your personal cash flow is stronger than what the rent alone shows. If the rent carries the loan on its own, the DSCR side often fits better, and that comparison is covered below.
What Documents Go in the File?
Lenders vary, so treat this as the typical list rather than a promise for every program:
- 12 months of personal or business bank statements.
- The LLC’s articles of organization, operating agreement, and EIN letter.
- A certificate of good standing and a resolution authorizing the borrowing.
- A signed personal guaranty from each required owner.
- Insurance showing the LLC as the named insured, plus the property tax bill.
- A payoff statement for the existing loan.
- An appraisal. For a single-family home, that usually means the standard single-family form with a rent schedule. For two to four units, it means the multi-unit form with operating income.
Business statements may bring extra requests, such as a business license or other proof the business is real. Have those ready, because a missing document stalls a file more often than weak income does.
Leverage and Occupancy: What the Program Allows
Occupancy sets both the leverage ceiling and the rule set that applies to the loan. For cash-out on bank statement documentation, the network’s typical ceilings look like this:
| Property use | Cash-out ceiling | Loan type |
|---|---|---|
| Investment property (non-owner-occupied rental) | Up to about 75% LTV | Business-purpose |
| Primary residence | Up to 80% LTV with a fixed expense ratio; 75% with an accountant-prepared ratio | Consumer mortgage |
| Second home | Up to 75% LTV, by loan size and credit | Consumer mortgage |
The accountant-prepared route is the lower ceiling, not the higher one. The 90% figure you may see for bank statement loans applies to primary-residence purchase and rate-and-term refinances, not to cash-out.
A rental held in an LLC is a business-purpose loan, so it sits outside the consumer-mortgage disclosure rules. Owner-occupied files, by contrast, are consumer mortgages, and the full consumer disclosure regime applies to them. Do not mix the two.
Two edge cases deserve a flag. A former primary residence you are converting to a rental can raise questions about purpose. So can personal use of the proceeds.
Entity borrowing therefore points to investment property. If the home you live in is the one you want to tap, it stays in your name. Consumer-purpose bank statement loans on owner-occupied homes are available through Lendmire in 16 states.
Loan sizes generally run from $125,000 to $3,500,000, and reserves commonly sit around six months of the housing payment. These are typical wholesale-network ranges, subject to lender guidelines, credit approval, and property review. They are not a commitment to lend.
Worked Example: A Duplex Moving Into an LLC
Run the numbers on a self-employed investor who owns a duplex in her own name. All figures below are modeled assumptions, expressed as percentages and ratios.
1. The setup. The existing loan balance sits at about 45% of the appraised value. She wants the duplex in a new LLC and wants cash for the next purchase.
2. The ceiling. An investment-property cash-out on bank statement documentation tops out around 75% LTV. That leaves roughly 30% of the property’s value as gross room before costs, payoff of the old lien, and reserves. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
3. The income review. The underwriter reads 12 months of her business statements. Transfers and loan proceeds come out. The program’s expense factor is applied, and her ownership share is counted.
4. The coverage check. A bigger loan means a bigger obligation. If the duplex’s rent clears the new payment at something like 1.2x, she has options on both the bank statement and DSCR sides. If rent covers it thinly, the bank statement route may be the one that works, because it leans on her cash flow.
5. The structure. The new loan is written to the LLC, she signs a personal guaranty, and title vests in the LLC at closing. The old lien is paid off from the proceeds, so no deed moves on a live mortgage.
6. The loose ends. Insurance and title are updated to match the entity. She asks the lender about any prepayment penalty before signing.
The stronger move here may be taking less than the full ceiling. Investors who pull every available dollar often watch their cash flow vanish. Taking 65% instead of 75% costs a little capital and buys a lot of breathing room.
Bank Statement or DSCR for an LLC Rental?
The two loans answer different questions. Bank statement asks whether you earn enough. DSCR asks whether the property earns enough.
| Factor | Bank statement | DSCR |
|---|---|---|
| Reviewed on | Documented deposits | Property rent vs. the payment |
| Fits best when | Your cash flow beats the rent | Rent carries the loan on its own |
| Documents | 12 months of statements | Lease or rent schedule, appraisal |
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Select lenders in the network will review files below 1.00x coverage, though leverage and terms adjust when they do. Lendmire’s complete DSCR loans guide covers that side in depth. Extended structures like interest-only and 40-year terms belong to the DSCR side as well. Alt-doc term length follows each lender’s program sheet, so it is a question to ask the lender rather than something to assume.
A home equity line is a poor match for this job. It generally needs individual or trust title, and on LLC-held property it often is not available at all. If you want the program details, Lendmire’s piece Bank Statement Cash-Out Refinance Rules for Moving the Loan From Your Name Into an LLC goes into the guidelines side.
The program that fits depends on your deposits, the property, your credit profile, and how much leverage you need. A broker that shops multiple wholesale lenders can match the scenario to the program.
Costs and Side Effects to Confirm
These are questions for your title company and attorney, not figures from this article:
- Does the property need a new title policy or an endorsement when vesting changes?
- Will your insurer reissue the policy with the LLC as named insured?
- What local recording and transfer charges apply where the property sits?
- Does the loan carry a prepayment penalty? Investment-property loans of this type can.
- How does the new, larger obligation change your monthly cash flow?
Ask these before the file goes to underwriting, not after.
What Can Go Wrong?
The deed-first mistake. Recording a deed into the LLC before the refinance can hand the existing lender a reason to call the loan. Even if the lender never does, you have created a risk you did not need.
Thin qualifying income. Gross deposits are not income. Once transfers come out and the expense factor is applied, the usable figure can be much smaller than the number you had in mind.
Messy entity paperwork. Names that do not match across the operating agreement, insurance, and title slow a file or stop it. Fix them first.
Ownership splits. A 50/50 LLC with no majority owner can change what a lender is willing to do. Entity structure can change eligibility, so bring the operating agreement to the first conversation.
Larger properties. Buildings with five or more units are often financed differently than one-to-four-unit homes. Whether a given program will take them depends on the lender, so ask early.
Heavy cash-out. Pulling the maximum can leave a rental that no longer pays for itself. Test the coverage ratio on the new loan before you commit.
This article is general education, not legal or tax advice. Tax treatment varies; consult a qualified professional, and talk to an attorney and a CPA about your own entity, title, and loan before you move anything.
Frequently Asked Questions
Can an LLC be the borrower on a bank statement cash-out refinance?
Yes, on a non-owner-occupied rental, subject to lender program eligibility. The LLC signs the note, you sign a personal guaranty, and your documented income under the applicable program supports the file. Owner-occupied homes generally stay in your personal name.
Do I have to sign a personal guaranty?
Typically, yes. The lender wants a person behind the entity, and a new LLC has no track record of its own. A multi-member LLC may need guaranties from more than one owner.
Can I do this on my primary residence?
Not through an LLC in the usual case. A primary-residence cash-out is a consumer mortgage in your name, up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio. A second home tops out around 75% LTV on a cash-out. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Is there a waiting period before I can refinance?
It depends on the lender’s program sheet. Some programs want you to have owned the property for a set time, and some look at how the current loan was originated. Ask your broker to confirm it for the specific lender before you plan around a date.
What can I use the cash for?
Business-purpose use keeps the rental loan in its intended category. Using proceeds for personal spending can raise questions about how the loan is classified, so confirm your plans with your attorney before you close.
Next Step
If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183 or request a quote.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Scotsman Guide, helping borrowers fit the boxes with non-QM
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Lenders Underwrite a Bank Statement Cash-Out Refinance at 75% Loan-to-Value · How to Plan and Use a Bank Statement Cash-Out Refinance to Buy Another House
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.