Can I put my house in my spouse's name before an SBA loan?
Short answer
Doing so within 6 months of applying does not help. Real estate an owner transfers to a non-owning spouse or minor children in that window stays available as collateral. Source: SOP 50 10 8.1, App. 19, Para. B.1; App. 15, Para. C.3.d.
A transfer within 6 months of the application does not take the property off the table. SOP 50 10 8.1, App. 19, Para. B.1, says real estate an owner transfers to a non-owning spouse or minor children in that period is not exempt from collateralProperty a lender can take and sell if a loan is not repaid. consideration. App. 15, Para. C.3.d, repeats the rule for business purchases.
Who the rule reaches
It applies when an individual, alone or with a spouse or minor children, owns 20% or more of the applicant. The lender must then consider liens on personal real estate owned individually or jointly with that spouse or those children. That includes commercial and investment properties the applicant does not occupy.
Older transfers
The SOP states no rule for transfers made more than 6 months before applying. The lender decides what collateral to take based on the circumstances of the individual loan (App. 19, Para. A.1).
A jointly owned home
If your spouse does not own the business but co-owns the home, the lender must require your spouse's signature on the appropriate collateral documents. Any spouse guaranty secured by that collateral is limited to the spouse's interest in it (Sec. A, Ch. 5, Para. A.2).
Disclose it
SBA Form 413 warns that a knowing false statement on it can bring criminal prosecution, civil penalties and denial of the loan. Talk to an attorney before moving title for any reason tied to a loan.
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