IRA Non-Recourse Loan Process & Timeline

NASB follows a simple, two-stage process for approving your IRA non-recourse loan: 


STAGE ONE

1.  Complete the loan application, and be sure to include your spouse's name if married.

 

2.  Provide the most recent IRA statements for all of your IRA accounts.

▪   You must have sufficient IRA funds available among all of your IRA accounts to fund the purchase, closing costs and reserve requirements. 

▪   The funds for reserves must be in the name of the same account holder who is purchasing the real estate. The reserve requirement may not be fulfilled by using IRA funds from an individual who is not the account holder. 

▪   If funds from another IRA are being used, the structure of the purchase (title) must reflect both IRAs as owners with defined percentages of ownership.

3.  Review NASB's eligible & ineligible property lists. 

▪   Not all real estate can receive financing under this program. If the property is a condo, the NASB condo questionnaire must be completed by a condo association representative. NASB will then be able to determine if the condo meets our criteria for eligibility.

Eligible properties include: Single family detached residential, warrantable condos, PUDs, duplexes, 4-plexes, and multi-family (5 or more units)

Ineligible properties include: Residential with large acreage, raw land, farms, manufactured or log homes, non-warrantable condos, condo-hotels, co-ops, time shares, hotels, senior or assisted living facilities, non-franchise restaurants, entertainment properties, and mini-storage

4.  Review the documents and procedures that your IRA custodian requires you to complete prior to signing a real estate purchase contract.

 

5.  Complete and sign all documents that are on your IRA checklist. 

▪   This transaction involves third parties that must coordinate closing times and procedures, such as title work, appraisers, insurance agents etc. Be aware that closing dates and time periods are essential and will take roughly 45 days to close from the date the loan application and appraisal fee is received by NASB.

6.  Upon negotiating your real estate contract, the IRA, LLC or trust company must sign the contract.

▪   Your IRA or LLC will typically be the owner of the Real Estate. Therefore, the Deed and title work should be titled in the name of the IRA, FBO account holder___(name)___. 

7.  If you intend to purchase the real estate in the name of an LLC with your IRA owning an interest in the LLC, we must have copies of the following documents for the LLC:

▪   Articles of organization (certified by the Secretary of State)

  Operating agreement

▪   Certificate of good standing (from the Secretary of State)

▪   Member resolutions authorizing the purchase and financing of the real estate

8.  All transfer of funds (earnest money and appraisal fee) must come directly from the custodian of the IRA. You will need to coordinate the transfer of funds with your IRA. We will not order an appraisal until we have the appraisal fee.

There are two options for paying the appraisal fee:

   1. You can have the custodian of your IRA wire or send a check to NASB for the appraisal from your IRA funds

   - OR -

   2. You may send non-IRA funds for an appraisal deposit, to cover the cost of the appraisal.

The cost of the appraisal will be paid at closing using your IRA funds and the appraisal deposit will be refunded to you upon closing.

9.  Contact your homeowner's insurance agent to inform the agent of the type of transaction this is and how the title will be held within your IRA. Your IRA must be listed as an insured.

▪   The policy term must be for one year or longer (No short term binders will be accepted). NASB must have a copy of the insurance policy and invoice 2 weeks prior to closing.


STAGE TWO

During Stage 2 of the process, NASB will:

►   review the completed loan application

►   verify your IRA asset information with the documents you provided

►   order the real estate appraisal

►   review title work, any documents related to an LLC, the completed real estate appraisal and other loan documentation.

 

►   obtain a schedule of fees from your title company 

►   confirm the closing date with the seller. 

►   notify the title company that the closing documents are to be signed as "read and approved" by the account holder, and forward to IRA custodian for signatures.

 

If approved, you will be notified so you can schedule a time with your title company to execute your documents as "read and approved" prior to closing.

After the IRA custodian (or LLC) has executed the closing documents, the custodian will wire the funds for closing (down payment and closing costs) to the title company for disbursement of sale proceeds to the seller.



IRA LOAN PROCESS TIMELINE

The IRA Non-Recourse loan process will take roughly 45 days from the date we receive the loan application and appraisal fee.

0-10 Days*  |  Items Needed

1. Application/checklist

2. Driver’s license

3. IRA statements

4. Contract

5. Appraisal fee

6. Instruction letter to purchase real estate

7. Order property insurance

8. Disclosures mailed out

10-30 Days*  |  Items Needed

1. Contract titled correctly

2. Contract executed by custodian

3. Satisfactory appraisal

4. Title commitment from title co./attorney

30-45 Days*  |  Process = 7-10 Days

1. Loan docs sent to title co./attorney

2. Title co./attorney mail docs to IRA account holder to approve

3. Borrower mails docs to custodian/administrator to execute

4. Docs mailed back to title co./attorney; loan is funded