Non-Recourse Lenders

Non-Recourse Lenders: Debt Financing Overview

A non-recourse loan, also known as debt-financing, can help /">self-directed IRA investors purchase one or more real estate investments if they don’t have enough funds in their IRA to cover the full cost. This can enhance portfolio diversification and provide more wealth-building opportunities for investors.

Equity Trust offers an exclusive non-recourse lender, IRA Power Loans, that can provide clients with debt financing for their self-directed real estate investment. With knowledgeable loan specialists and a proprietary application process, IRA Power Loans can help ensure a smooth transaction.

As you consider this type of financing, there are a couple of things you should keep in mind:

• An account can take on a loan to purchase property. The loan must be non-recourse, meaning the only collateral securing the loan is the property being purchased with the loan.
• Other assets held within the account or the account holder personally cannot be held liable in the event of a default on the repayment of the non-recourse loan.

Looking for help navigating the non-recourse lending process? The Real Estate Investing Hub includes resources to support your search for IRA-friendly lenders, plus access to real estate reports, tax services, and other tools to assist with your next purchase.

How to make an investment with a non-recourse lending

For Equity Trust clients looking to use non-recourse lending, note that the following must be submitted with your debt-financed real estate purchase request:

• Real Estate Direction of Investment

• Non-Recourse Loan Documentation
  • Promissory Note (including verbiage that loan is non-recourse)
  • Deed of Trust/Mortgage
  • All loan paperwork should be signed by the account holder, including Settlement Statement or HUD showing the correct titling and funding amount along with any documents that will require Equity Trust Company’s signature

Mortgage payments of the non-recourse loan held within the account must be paid to the lender from the account.

Bill payments must be submitted to send payment for the mortgage. A recurring bill payment can be set up to automatically send payments for the mortgage on a scheduled basis: Log into your myEQUITY account and navigate to Money Movement > Bill Pay to set this up.

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