Mortgage / Loan within IRA

[ParFour]

I know it is possible to own real estate within an IRA, but is it possible to hold a mortgage / loan as an asset within an IRA? I suspect no, but figured I would crowd source for additional info.

 

[pb4uski]

It is, but as I recall the borrower cannot be a related party.

 

[OldShooter]

I know it is possible to own real estate within an IRA, but is it possible to hold a mortgage / loan as an asset within an IRA? I suspect no, but figured I would crowd source for additional info.

I think it is probably possible, but it depends on the custodian. For many years I held private placement stock in IRAs, but as I sort of lost interest in that it also seemed that fewer and fewer custodians would permit unusual assets. Schwab, for one, would hold my private placements but since then has dropped this option IIRC.

You won't be able to do anything that smells like self-dealing, but in the end defining that probably also depends on the trustee.

So the short answer to your question from SGOTI is: Probably yes, depending on your trustee's willingness.

 

[ParFour]

Thanks. Surprised it could actually be an option. Would be to a family member so sounds like that would disqualify. Was looking to lock in something close to current 30yr rates in place of bonds for a portion of FI allocation.

 

[pb4uski]

I had had the same thought... being the lender on DD's mortgage with 20% down and conventional terms... it is just that I would receive the interest that she would otherwise pay to the bank/mortgage company.... but the related party restrictions made it unviable.

 

[OldShooter]

Just to clarify my SGOTI post: I don't know specifically when a financial asset crosses the line to self-dealing. I did just now do a quick search, though, and found this: https://www.investopedia.com/articles/retirement/06/alternativeinvestments.asp It is on the internet and thus must be true. If I were serious, though, I'd go looking for the IRS rule.