Troutville, VA asked in Banking, Business Formation, Business Law and Real Estate Law for Maryland

Q: I paid cash for a house and am now renting it out. Is it possible to form an LLC and mortgage the house from myself?

I would like to mortgage 80% of the home value.

1 Lawyer Answer
Cedulie Renee Laumann
Cedulie Renee Laumann
  • Business Law Lawyer
  • Crownsville, MD
  • Licensed in Maryland

A: If the question is "can an individual make a loan to a business they own," the answer is "generally, yes." The individual would of course need to report any interest income received. If the question is "can a business make a loan to an individual who owns the business" the answer is "it depends." Maryland law licenses mortgage lenders and usually a business cannot make a mortgage loan to any individual if the lender is not licensed. Additionally, mortgages require payment of transfer and recordation taxes if they are not a refinance or recorded within 30 days of the home purchase deed.

You may wish to contact an attorney to discuss your situation and get legal advice specific to your particular scenario.

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