📈 How to Use a Self-Directed IRA for Real Estate (And What Lenders Approve) 💼

💰 Self-Directed IRA Real Estate Investments: What Lenders Really Allow 🏡

August 26, 2025•2 min read

💰 Self-Directed IRA Real Estate Investments: What Lenders Really Allow 🏡

📈 How to Use a Self-Directed IRA for Real Estate (And What Lenders Approve) 💼

💰 Self-Directed IRA for Real Estate: What Lenders Allow

Investors looking for more control over their retirement funds are increasingly turning to self-directed IRAs (SDIRAs) to purchase real estate. While these accounts open the door to powerful wealth-building opportunities, financing rules can be tricky. Understanding what lenders allow (and don’t allow) can save you from costly mistakes.

✅ What Is a Self-Directed IRA?

A self-directed IRA lets you invest retirement funds in alternative assets beyond traditional stocks and bonds. This includes rental properties, multifamily investments, raw land, and even commercial buildings.

🏦 Can You Get a Mortgage with a Self-Directed IRA?

Yes—but not every lender will allow it. Traditional mortgage lenders usually shy away, while specialty lenders familiar with SDIRA rules can offer non-recourse loans. These loans are required by the IRS, meaning the lender can only claim the property—not your personal assets—if the loan defaults.

🚫 Restrictions to Know Before Investing

1. No Personal Benefit – You can’t live in or personally use the property.

2. No Prohibited Transactions – Family members and disqualified parties can’t directly benefit.

3. Loan Must Be Non-Recourse – Your IRA owns the asset, and you can’t personally guarantee the loan.

💡 What Lenders Typically Allow

· Investment Properties Only – Single-family rentals, small multifamily, or commercial real estate.

· Higher Down Payments – Expect 30–40% down with non-recourse financing.

· Stronger Cash Flow Requirements – Lenders prioritize DSCR (Debt Service Coverage Ratio) since your IRA, not you, is the borrower.

· IRA Custodian Approval – The custodian managing your SDIRA must approve and execute documents.

📊 Why This Strategy Matters for Investors

Using a self-directed IRA to buy real estate can:

· Diversify your retirement portfolio beyond Wall Street.

· Generate tax-deferred or tax-free rental income (depending on Roth vs Traditional IRA).

· Create long-term equity growth while protecting personal assets.

But success depends on working with a mortgage broker who understands non-recourse financing and SDIRA rules. The right lender can make or break your investment strategy.

👉 If you’re exploring real estate investing with your self-directed IRA, reach out today. We’ll help connect you with lenders who know how to structure these loans the right way.

https://www.billrapponline.com/

https://findamortgagebroker.com/Profile/WilliamRappJr28883

https://billrapp.commloan.com/

https://billrapponline.com/financingfuturescre-houston-katy

https://houstoncommercialmortgage.com/

https://author.billrapponline.com

https://doctorvideo.billrapponline.com/

https://veteransvideo.billrapponline.com/

https://mortgageviking.billrapponline.com/

https://fha203h.billrapponline.com/

https://renovationvideo.billrapponline.com

https://medallionfunds.com/bill-rapp/

https://www.amazon.com/dp/B0F32Z5BH2

https://veed.cello.so/FOmzTty6oi9

Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

Back to Blog