So maybe I made a mistake,..all my buildings are paid of 8 of them... and I want to upgrade one with a new roof porch etc. want to pull out about 50K as I did the same several years ago and actually paid it off very quickly,

Well I called the same bank and asked to do it again,..so the person wants not to do the same property (has an apt which I occasionally stay at,upstairs .and a small office. on the first floor, I have owned this since 1972,.. So she called back saying that they were only willing to do my "primary residence, and that I would have to go to their commercial dept for that loan.

she has been hard to get so I don't have an answer to what disadvantage that would entail, over 35 years that one other money pull out was ever done on the dual property.

I feel its still my home but she apparently feels otherwise

Unless you need the roof and porch ASAP, with paid off property, I would just save up for a few months and pay cash. Commercial loan rates right now are too high.

Unless you need the roof and porch ASAP, with paid off property, I would just save up for a few months and pay cash. Commercial loan rates right now are too high.

I've run into that too, with property owned by the LLC.

I started to learn what all I had to do for a commercial loan & decided instead to buy the next house in my personal name - because I planned to get a HELOC on it, & knew it would be much easier.

I'm not worth much (lol), so not worried much about ambulance-chasers.

The HELOC also makes it look encumbered if anyone wants to look.

Be careful claiming that building as your legal residence on loan paperwork when it's not. That's called fraud and it can get quite costly when you get caught.

Typically anything a bank can't repackage and sell on the secondary market falls under their "commercial" lending, even if it's not strictly commercial property. So if this loan wouldn't qualify under the normal conforming residential lending, that's why they're calling it commercial.

Commercial loans are more flexible in many ways and involve a lot less paperwork usually, but they carry the following negatives compare to conforming residential:

1) Higher interest rates.

2) Short fixed rate, then variable rates. 3/1 or 5/1 are common.

3) Some have balloon payoff requirements of 2 - 5 years.

4) More stringent LTV requirements, often no greater than 80%.

But they have the following advantages:

1) Faster and easier to qualify.

2) Bank keeps the loan in their portfolio so it's not getting resold.

3) Much more flexible usage and property types.

4) Not always reported to credit bureaus.

The other thing is banks usually want annual financial statements (tax returns, PFS) to document that you're still a stable risk. Typically they require that in the loan paperwork, and if you refuse to provide it they may have a provision where they can call the loan due early.

Mostly the difference is that commercial loans are mostly amortized over 20 years but expire and have to be refinanced at 5 years.

I just quit claim the property back into my name for the refi. Have even had the title company do it for me.

Then when I am done with the closing I give it a week and quit claim it back into the LLC.

Have never had an issue. All the properties are in the LLC and most have loans on them.