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There is market data to support that this trend will continue to grow. This demand creates an opportunity for self-directed IRA investors to grow wealth and experience financial success by investing in real estate. Purchasing rental property in your IRA creates a new avenue for financial possibilities, which can add significant value to your retirement portfolio.
Did you know that your Self-Directed IRA can obtain a non-recourse loan to purchase real estate?
A non-recourse loan is one in which the Self-Directed IRA or the account holder are not liable for repayment of the loan. The is no recourse against the individual account holder(s) or the balance(s) of your IRA funds. In the event of default/foreclosure, the lender can only look to the property held in the IRA as the sole source of repayment. The non-recourse lender cannot pursue other assets owned by the account holder or the IRA.
Benefits of owning rental/investment property in a Self-Directed IRA
While traditional and Roth IRAs are an excellent way to help you save for the future, your investment options are often limited to stocks, CDs, bonds, and mutual funds. A Self-Directed IRA is different. Rather than restricting you to traditional investments, a Self-Directed IRA allows you to expand your options to real estate, joint ventures, and more. With a Self-Directed IRA, you have the freedom to explore these alternative investments and the chance to grow your retirement portfolio. The investments you purchase with loan proceeds can produce the income needed to reach your retirement savings goals.
In addition to increased portfolio diversification, using a Self-Directed IRA to purchase real estate can have the following benefits:
Cogent Bank provides non-recourse financing for the following property types:
Cogent Bank offers the following non-recourse IRA loans:
Given that a mortgage loan held by your Self-Directed IRA is both non-recourse and held for investment purposes, the Self-Directed IRA account balance must include reserves to cover a certain number of months of mortgage payments in the event of non-payment of rent or vacancy. Reserve requirements for your non-recourse loan with Cogent Bank can vary depending on your loan amount and loan to value, but typically 6-12 months of reserves for principal, interest, taxes, insurance and any association fees are required to be held in your Self-Directed IRA.
Fees and expenses for a non-recourse loan are similar to a traditional mortgage and may include:
Self-Directed IRA non-recourse loans are for investment purposes only. A Statement of Business Purpose and Occupancy, declaring that the property is or will be used for business or investment purpose only, is required prior to closing. These can vary depending on the loan amount, loan characteristics and property location.
A self-directed IRA that has the required down payment and contingency reserves available. This is subject to Cogent Bank underwriting approval, which will include satisfactory review of the subject property appraisal, calculation of subject property rental income and expense amounts and corresponding ratio and liquidity verification.
Yes, with at least 35% or more of the purchase price vested in a self-directed IRA, the IRA can purchase rental property using a non-recourse loan. This is subject to eligibility and loan approval, including an acceptable real estate appraisal, as determined by Cogent Bank. Depending on the loan amount, loan to value and loan characteristics, down payments can vary and can be up to 65%.
Yes, but the IRA must have owned the property for a minimum of 12 months, and all funds must be distributed back into your IRA. This provides you will the ability to purchase more assets with your IRA.
Yes, if the subject property was purchased without financing within the last 6 months, delayed financing is acceptable and not subject to cash out seasoning requirement of 12 months.
In addition to cash out and delayed financing, Cogent Bank offers rate and term refinances for rental/investment properties already held in your IRA. Ask your Cogent Bank self-directed IRA loan specialist for details.
Yes, but please consult with your tax and/or legal advisor or self-directed retirement account administrator to confirm the entity structure requirements applicable to your individual situation.
No, the IRS prohibits personal use of real estate, present or future with self-directed IRA funds. Please consult with your IRA custodian and/or tax advisor for additional information.
No, IRS regulations prohibit transactions that are considered self-dealing. Please consult with your IRA custodian and/or tax advisor for additional information.
All expenses and payments associated with the property owned by your self-directed IRA must come from your self-directed IRA account. These types of expenses could include, but are not limited to: repairs, contractors, property taxes, insurance and HOA fees. Please consult with your IRA custodian for further information.
Yes, all income generated by a self-directed IRA owned real estate must be returned to your self-directed IRA. This ensures that you retain the tax-deferred or tax-free status of the investment. Please consult with your IRA custodian for further information.
No, you will need to select your own IRA Custodian.
There is no pre-payment penalty if the loan is paid down <20% in the first year, or in full after 1 year.
Yes, Cogent Bank will finance eligible rental/investment properties in all 50 states. Reach out to a Cogent Bank self-directed IRA loan specialist today for details.
Expand your retirement savings potential through a Self-Directed IRA (SDIRA) loan for real estate investment. At Cogent Bank, we specialize in non-recourse loans, providing you with financing solutions designed specifically for SDIRA investors. Our team understands the unique requirements of self-directed investing, helping you secure funding while protecting your retirement assets.
Whether you’re purchasing your first investment property or expanding your real estate portfolio, Cogent Bank offers competitive loan options tailored to your needs. With expert guidance and a streamlined lending process, we make it easy to take the next step in building your financial future.
Ready to invest? Contact a Cogent Bank SDIRA loan specialist today to learn more.
A Self-Directed IRA (SDIRA) is a retirement account that allows you to invest in a broader range of assets than a traditional IRA, including real estate, while maintaining the tax advantages associated with IRAs. Cogent Bank specializes in non-recourse loans for real estate investments held within Self-Directed IRAs.
A non-recourse loan is a loan where the financed property serves as the sole collateral. If the loan defaults, the lender’s recovery is limited to the property itself and cannot pursue your personal assets or other IRA holdings. This structure allows eligible SDIRA investors to finance investment real estate while protecting personal liability.
Yes. Qualified Self-Directed IRAs can use a non-recourse loan to purchase eligible investment properties, allowing investors to leverage retirement funds instead of paying the full purchase price in cash. Eligibility, underwriting approval, and minimum equity requirements apply.
Cogent Bank finances a variety of investment property types through eligible Self-Directed IRAs, including:
– Single-family homes
– Townhomes and PUDs
– Two- to four-unit residential properties
– Eligible warrantable condominiums
Property eligibility is subject to underwriting guidelines.
Borrowers must have a properly established Self-Directed IRA with sufficient funds for the required down payment and reserve requirements. Loan approval also depends on underwriting, appraisal results, rental income analysis, liquidity, and other lending criteria.
Yes. Cogent Bank offers refinance options for qualifying properties already held within a Self-Directed IRA, including cash-out refinancing, delayed financing, and rate-and-term refinances, subject to eligibility requirements.
Cogent Bank offers several financing options for eligible SDIRA investors, including:
– Purchase loans
– Refinance loans
– Fixed-rate mortgages
– Adjustable-rate mortgages
– Interest-only loan options
Loan availability depends on borrower qualifications and underwriting approval.
No. Cogent Bank provides financing for Self-Directed IRA investments but does not establish Self-Directed IRA accounts. Investors must first open an SDIRA through an independent IRA custodian before applying for financing.
Yes. Rental income generated by investment property owned within a Self-Directed IRA must be deposited back into the IRA to preserve its tax-advantaged status. Investors should consult their IRA custodian regarding applicable IRS rules.
Yes. Self-Directed IRA loans generally require reserves within the IRA to cover several months of principal, interest, taxes, insurance, and applicable association fees. Reserve requirements vary depending on the loan amount and loan-to-value ratio.
Yes. Cogent Bank provides eligible Self-Directed IRA non-recourse financing for investment properties located throughout all 50 states, subject to underwriting approval and property eligibility.
Cogent Bank generally does not charge a prepayment penalty when the loan is paid in full after one year or when principal reductions meet the program guidelines. Your loan specialist can explain the specific terms that apply to your financing.
Cogent Bank specializes in non-recourse lending for Self-Directed IRA investors, offering financing solutions designed specifically for retirement real estate investing. Their experienced lending specialists understand the unique requirements of SDIRA financing and guide borrowers through the entire lending process.
Before purchasing investment real estate, it’s helpful to estimate monthly payments and financing costs. Cogent Bank provides online financial calculators to help borrowers evaluate mortgage payments and refinancing scenarios.
To begin the process, contact a Cogent Bank Self-Directed IRA lending specialist to discuss your investment goals, financing needs, and loan options. They’ll guide you through eligibility requirements, documentation, underwriting, and closing.