dscr loa

Why does a DSCR lender need an operating agreement for my LLC if its not required by the state? This question comes up at least half the time in DSCR loans. Often, DSCR lenders will not close unless there is an operating agreement in the borrower’s file. The reason for this is that the borrower on the loan technically is the LLC. The person behind the LLC is the sponsor, or guarantor. The lender wants to know who legally has right to the property through the LLC. One of the jobs of the operating agreement is to outline who owns the LLC and what percentage they own. Typically any sponsor who owns 20-25% or more of the LLC would be required to be a signer on the loan as well. If you need a mortgage and need help with this, […]