AGENT KNOWLEDGE SERIES · INVESTMENT PROPERTY
LLC After Closing?
Here’s the Answer.
“Now that we’re done, can I move this into my LLC without the bank calling the loan due?”
Your client is going to ask this. The answer you give in that moment — calm, clear, and correct — is the difference between an advisor and an order-taker.
Most mortgages include a due-on-sale clause — the lender can call the loan due if the property is transferred. But if the loan was sold to Fannie Mae or Freddie Mac, there’s a clear path forward.
CONDITIONS THAT MUST BE MET
- 1
Borrower controls the LLC. They must hold majority interest or control. No minority or non-owner transfers.
- 2
Original loan terms stay intact. Occupancy requirements (typically 12 months as primary) cannot be violated.
- 3
Fannie Mae loans originated on or after June 1, 2016. Freddie Mac maintains similar treatment.
WHAT YOU NEED TO KNOW — & COMMUNICATE
| YES | WATCH OUT |
|---|---|
| They can transfer title into their LLC without triggering the due-on-sale clause — if all conditions are met. | If they want to refinance later with conventional financing, title must return to their personal name before closing. |
Fannie Mae requires title to be held by a natural person to meet standard underwriting. Plan ahead — this isn’t a deal-breaker, just a step.
YOUR SCRIPT IN THE MOMENT
“If you control the LLC and we honor the original loan terms, you can transfer title without the loan being called due. Just know that if we refinance later, we may need to move it back into your name.”
Clear. Direct. No drama. That’s how you become the advisor they keep calling.
Questions? Let’s connect.
