The contract says subject-to. You take the deed. The seller's existing loan stays in the seller's name and is not paid off at closing. That structure does not skip the file this desk actually reads. The deed and title still have to vest in your LLC, and the entity paperwork still has to be clean. This page covers the practical pieces: the loan that stays, due-on-sale risk, title and insurance paperwork, why vesting has to be the entity, and how a private-money loan behind or alongside that existing loan gets read.
It is not a rewrite of why investors form an LLC before they ask for the money. A bank that will only close in your personal name is a different wall, on they will only close in your personal name. A second lien behind a first that is already maxed lives on GAP behind a first lien. Short-term capital while a sale or a takeout is still forming lives on bridge loans for LLC investors.
Funded Funding is a national private-money brokerage. We are not a bank. We are not an NMLS-licensed consumer mortgage lender. The loan is business-purpose, closed in an LLC or another business entity. The desk floor is $100k. No owner-occupied. This is a nationwide note, not a city page. Start on the Funded Funding homepage for the product list, or read what the desk is.
What buying subject-to actually changes
On a subject-to purchase, the deed moves to the buyer and the existing loan is not paid off. The note stays the seller's obligation. The investor may agree to make the payments. That agreement does not, by itself, put the investor on the note or take the seller off it. If a lender has formally released the seller and put a new borrower on the loan, that is an assumption, and it is a different file. Say which one the contract is.
The existing loan is still a lien on the property. Balance, payment, maturity, and who is obligated all stay on the file. A contract line that says subject-to is not a payoff letter. Bring what you have on the loan: the servicer if you know it, the last statement, and whether the seller is current. If you do not have the statement, say so. Do not send a guessed balance.
You will not occupy the property. Subject-to is not a way to buy a house you will live in and route it through this desk. If you will live there, stop. This site is the wrong desk.
Due-on-sale is a real risk, and it is your attorney's question
Many residential notes let the lender call the loan due if the property is transferred without the lender's consent. A subject-to deed is a transfer. The lender may or may not act on the clause. This page will not tell you the clause is harmless, and it will not tell you a particular lender will ignore it. The risk is real. Treat a call as something that can happen, not as a rumor.
Get your own real estate attorney before you rely on the structure. We are not lawyers. This page is not legal advice, and it is not tax advice. We will not tell you the transfer is permitted, how to word the contract, or what the seller should be told. Those are questions for counsel who represents you. A blog post is not that counsel.
What the desk needs is narrower. We need to see that you understand the existing loan stays, that a due-on-sale call is a risk on the file, and that your exit still works if that loan has to be paid off sooner than the contract assumes. A plan that only works if the existing lender never notices the deed is not a plan we can treat as certain. Name the risk. Do not hide it in the purchase price.
The deed and title still vest in the LLC
Subject-to moves the deed. It does not leave title in the seller's name, and it does not put this desk's borrower in your personal name. The LLC, or the other business entity, takes title. The same entity is the borrower on any new loan this desk places. Why investors close in an entity is the LLC note. A shop that will only close in your personal name is a different product. This desk does not close that way. See they will only close in your personal name.
If the deed is still in the seller's name, there is no transfer yet, and there is nothing for an entity loan to attach to. If the deed is in your personal name, the file is the personal-name close this desk does not write. If title is in one LLC and the borrower is another, say so before anyone orders a read. Moving title later is a new deed, not a correction on the application.
A trust, a partner's personal name, or "and/or assigns" on the contract is not vesting. The deed the title company will record has to name the entity. If the contract still needs an assignment into the LLC, that assignment has to be real and allowed by the contract. This page assumes you are the buyer, and the buyer is the entity. The entity name on the deed has to match the entity name on the loan, including punctuation.
The clean entity file
The entity that takes the deed is the entity we read as the borrower. A name on a contract is not a file. Bring the documents that show the company exists, that it can sign, and that the person in front of the closing is allowed to bind it.
- The operating agreement. Who may sign, and whether a manager or the members have to approve a loan and a deed. A template with blank signature lines is not an agreement that has been adopted.
- The EIN. The letter, or other proof of the employer identification number. A number typed into an email is not the letter.
- Good standing. From the state where the entity was formed. If the property sits in another state, say whether the entity is registered to do business there. We are not your lawyer on that registration. We need to know the status you have.
- Signer authority. The person who will sign the note and the deed has to be the person the operating agreement allows. If the agreement names a manager and a different person is trying to sign, the file is not clean.
- One spelling. The entity name should match on the operating agreement, the good-standing certificate, the deed, and the loan. A comma or an LLC suffix that differs is a title problem, not a style choice.
A brand-new LLC can still be the borrower when those documents exist and the deal is a business-purpose investment you will not occupy. "We will form it after you approve us" is not a file. Form it, get the EIN, and put the operating agreement in the package before you ask for a read. Nothing here is a promise that a new entity is approved. Terms vary by lender, property, and borrower entity. Not available in every state.
Title, insurance, and the authorization paperwork
Title has to show the deed into the LLC and the existing mortgage that is staying. The commitment should list that lien, not a payoff of it, unless the deal has changed and the loan will be paid. Liens you did not know about still have to be cleared or explained. A subject-to contract does not erase a judgment, a tax lien, or another mortgage the seller did not mention.
Insurance has to match the owner. After the deed, the LLC owns the property, so the policy should name that entity. The existing lender may still require its own mortgagee status on a policy that covers its collateral. Those are two facts. They can conflict if nobody has read the seller's loan. Bring the current policy and say who the agent is. We will not invent a coverage requirement on this page. Your counsel and the insurance agent sort what the existing lender's documents demand. The desk needs to see that a policy can be bound to the entity that will own the property.
Authorization paperwork is the practical pile around a loan that stays in someone else's name. The seller may sign something that lets you receive statements, make payments, or talk to the servicer. That paper is between the seller, you, and your lawyers. It does not make you the borrower on the existing note, and it does not replace the deed. If the seller will not sign what title or the servicer asks for, say so. A file that depends on a seller who has already left the conversation is a file that can stall on a Friday.
A private-money loan behind or alongside the existing loan
If the existing loan stays, a new private-money loan is usually junior to it, or it is more debt next to it. The desk reads both. The existing balance is debt. The new loan is debt. Combined exposure is the read, against the same property and the same exit. How a second piece behind a first lien is read, including consent and the paper between lenders, is GAP behind a first lien. The broader stacking note is GAP funding for real estate investors.
The existing lender's due-on-sale clause and that lender's rule on a junior lien are related, and they are not the same sentence. A transfer can give the lender a right to call the loan. A second mortgage can be a problem under the first note even when nobody is arguing about the deed. Read the existing loan, or have your attorney read it, before you assume a second is allowed. If the first lender's answer is no, that structure is a no. A quote that assumes consent nobody asked for is not a quote.
If the new money is meant to pay the existing loan off at closing, you are not buying subject-to. You are buying with a payoff. Say that. The file is then a purchase in the LLC, and the existing lien is a closing item, not a loan that stays. Do not label a payoff "subject-to" because the contract used the phrase once.
If the subject-to piece is a short hold while a sale, a refinance, or another takeout is still forming, the time question is an interest-only bridge, and the product is bridge loans for LLC investors. A bridge does not make the existing lender's due-on-sale clause go away, and it does not become a promise that permanent debt will show up. A clean entity file means the desk can read the loan. It does not mean a lender will fund it.
What an investor should bring
- The contract. The subject-to language, the price, who the buyer is, and whether the existing loan is staying or being paid off.
- The existing loan, as you know it. Statement, servicer, who is obligated, and whether the seller is current. If you do not have it, say what is missing.
- The vesting plan. The LLC that will take the deed, and confirmation that title will record in that name.
- Entity documents. Operating agreement, EIN, good standing, and the signer. Same spelling on each.
- Title and insurance. What is on title now, and who will bind a policy to the entity.
- Your attorney. Say that you have counsel on the due-on-sale question, or that you do not yet. We will not be that attorney.
- The exit. Sale, refinance, or a hold. If a new loan sits behind the existing one, the exit has to deal with both.
- Occupancy, unit count, taxes, and insurance. You will not live there. This desk reads 1–4 unit investor files differently from 5+ unit and commercial files.
When it works, and when it is a no
It can work when the buyer is an entity, the deed will vest in that entity, you will not occupy the property, the existing loan is disclosed, you have your own attorney on the due-on-sale risk, and any new loan is at or above the $100k desk floor. The entity file has to be clean enough to sign: operating agreement, EIN, good standing, and a signer who actually has authority.
It is a no when you will live in the property, when title will stay in the seller's name or land in your personal name, when the entity documents do not exist, when the existing loan is left out of the package, when the exit only works if the first lender never looks, or when the request is under the $100k desk floor. A subject-to contract does not lower that floor, and it does not turn a house you will live in into a business-purpose loan.
What this desk is — and is not
The property can be in any state we can close. We do not publish an office address. This is a national desk, not a city page. Terms vary by lender, property, and borrower entity. Not available in every state. We will not invent a rate, a credit cutoff, a leverage figure, or a balance on the seller's loan.
Business-purpose only. Borrowers close in an entity. If you will live in the property, this site is the wrong desk. We are not a bank, and we are not an NMLS-licensed consumer mortgage lender. We do not give legal advice or tax advice on a subject-to transfer. We do not warehouse the loan.
How to put the file here
- Confirm you will not occupy the property. If you will live in it, stop.
- Entity ready to take the deed. Operating agreement, EIN, good standing, and a signer with authority. If the deed is still planned in your personal name, read they will only close in your personal name and do not send that vesting here.
- The existing loan, as it is. Staying or paid off. The statement if you have it. Your own attorney on the due-on-sale question.
- Any new loan you want read. Behind the existing lien, or a payoff. If the first lien is staying and a second has to fit, read GAP behind a first lien before you call it a plain purchase. A short hold is a bridge, not a promise of takeout.
- Apply. Same intake as the rest of Funded Funding: the application. Apply here if the question is a subject-to purchase that still needs a clean entity file.
Frequently asked questions
Does subject-to mean the existing loan moves into my LLC?
No. On a subject-to purchase the deed can move to your LLC while the existing loan stays in the seller's name. The seller remains the borrower on that note unless that lender actually releases them. An agreement to make the payments is not that release.
Why does the desk still need the deed in the LLC?
Because this desk's borrower is the entity, and the collateral has to be owned by that borrower. Subject-to is not a personal-name close, and it is not a deed that stays with the seller. Title, the operating agreement, and the signer have to match.
What entity documents should be in the file?
The operating agreement, the EIN, good standing, and proof of who can sign for the LLC. The entity name should match on each of those and on the deed. A plan to form the LLC after a yes is not a file.
Is a subject-to transfer legal, and what about due-on-sale?
Get your own attorney. Many loans let the lender call the note due if title transfers without consent. That risk is real. This page is not legal advice, and it will not tell you a lender will ignore the clause.
How is a new private-money loan read if the existing loan stays?
As additional debt on the same property, often in second position. The desk reads the combined loans, the exit, and whether the existing lender must consent. That read is the same kind of file as a GAP loan behind a first lien. It is not an approval, and it is not available in every state.
What is the minimum to fund, and who closes?
The desk floor is $100k. Files under that are not this desk. Borrowers close in an LLC or another business entity. The loan is business-purpose. If you will live in the property, this site is the wrong desk.
Ready to get funded?
If the LLC can take the deed, you will not occupy the property, and you can show the existing loan, send the file. Include the operating agreement, the EIN, good standing, and who signs. No fake funded counts. No stock testimonials. No owner-occupied loans.
Ready to get funded?
Apply on the same intake we use live, or call or text (520) 552-7065.