Non-recourse Loans

FirstBank's unique loan program offers non-recourse loans to purchase or refinance real estate within your self-directed retirement plan.

For more information, please visit your local FirstBank branch or contact Wil Hotz at 303-456-2276 today.

Plan Qualifications

  • Self-directed plans should be in place prior to application.
  • Only single member plans or member/spouse plans are allowed. No multiple employee plans. Often, separate plans can partner together to purchase a property.
  • Plan documentation is subject to review and approval by FirstBank approved attorneys.
  • Liquidity in the plan is necessary.

Property Qualifications

  • 65% maximum Loan-to-Value (LTV) and Loan-to-Cost (LTC).
  • Income producing 1-4 family residential properties and commercial properties are eligible.
  • Properties must be located close to a FirstBank branch.
  • 75% of rents must cover principal, interest, taxes, and insurance payments.

Commercial properties may be subject to pre-lease requirements and a historical analysis of cash flow will be performed if applicable.

Underlying Participant Qualifications

Per IRS code, these must be non-recourse loans. Although you cannot personally guarantee the loan an analysis of personal debt service, net worth, and credit is required.

Example Transaction (1-4 Family Residence)

  • $300,000 Purchase Price

    x 65% Maximum LTV

    $195,000 FirstBank Mortgage Loan (to your Self-Directed Retirement Plan)

  • $195,000 Mortgage to your IRA

    @ 4.75% APR (FIRM 5/30-year Mortgage)

    $1,221/month Principal, Interest, Taxes & Insurance (PITI)

  • $1,800/month Proposed Rent

    x 75% (to discount for vacancies, utilities, etc.)

    $1,350/month "Discounted Rent"

  • $1,350 Discounted Rent

    -$1,221 Mortgage Payment (PITI)

    $129/month Positive Cash Flow

This property would qualify since the discounted rent is more than the principal, interest, taxes, and insurance payment.

It is important to understand that FirstBank can help you facilitate the financing of a property; however, we cannot give legal or accounting advice. Please consult your attorney, investment advisor, and/or tax consultant.