Can I use my IRA assets to guarantee a loan or personally guarantee an IRA loan?

No. A “prohibited transaction” is a transaction that, directly or indirectly involves loan of money or other extension of credit between a plan and a disqualified person. Normally, when an individual purchases real estate with a mortgage, the traditional loan provides for recourse against the borrower (i.e., personal liability for the mortgage). However, if the IRA purchases real estate and secures a mortgage for the purchase, the loan must be non-recourse; otherwise there will be a prohibited transaction.

Please contact one of our Self Directed IRA Experts at 800-472-0646 for more information.