Who is and what type of entities can qualify as borrowers?

What Types of Entities Can Qualify as Borrowers for Rental Portfolio Loans?

Rental Home Financing requires that all properties in the financed portfolio be owned and operated by a corporate entity such as an LLC or corporation. All loans are made to business entities (LLC, corporation, or trust). Single property DSCR programs may also close in an individual borrower's name. This entity requirement provides liability protection for the investor and creates a clean legal structure for the collateral.

In most cases, a newly formed single-purpose entity is created specifically to hold the portfolio being financed. This is standard practice in commercial real estate lending and offers several advantages over personal ownership, including asset protection, simplified tax reporting for the portfolio, and a clear separation between the borrower's personal finances and the investment properties. Our legal team works with borrowers to structure the entity correctly at closing.

What Entity Types Are Accepted?

The following entity structures are eligible as borrowers under our lending programs:

• Limited Liability Companies (LLCs) -- the most common structure for rental property portfolios, offering pass-through taxation and liability protection
• Corporations -- C-corps and S-corps are both eligible, though LLCs are more frequently used for real estate holdings
• Delaware entities -- our attorneys are set up to streamline closing documents and entity formation through Delaware, which is an approved state for organizational documentation
• Trusts and series LLCs -- may be considered on a case-by-case basis depending on the structure and jurisdiction

If you already hold properties in an existing LLC, those assets can typically be transferred into the new borrowing entity as part of the loan closing process. If your properties are currently held in your personal name, they will need to be transferred into the corporate entity before or at closing. Our team coordinates these transfers as part of the standard loan process, so you do not need to handle the legal work independently.

Why Does Rental Home Financing Require an Entity Structure?

The entity requirement serves both the lender and the borrower. For the lender, a single-purpose entity creates a clean collateral package where the only assets in the entity are the financed properties. For the borrower, it provides a corporate veil that limits personal liability to the capital invested in the entity. Combined with proper LLC structuring, this gives you meaningful separation between personal and investment assets. This structure also simplifies portfolio management, property transfers, and future refinancing.

Learn more about borrower requirements under our blanket and multifamily loan programs.