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Do you own a small business, and there’s a need for high-value equipment? Or maybe you want to purchase commercial real estate. If you’re in need of finance and are unable to figure out the best possible solution, an SBA 504 loan may just be the oil to your ache.

Presenting you with this guide is ALT Financial. We will look everything you need to know about SBA 504 loan.

SBA 504 Loan

For small business owners looking to grow, expand, or invest in long-term assets, financing can be one of the biggest hurdles. That’s where the SBA 504 Loan Program comes in — a powerful tool backed by the U.S. Small Business Administration (SBA) that offers affordable, long-term, fixed-rate financing.

The SBA 504 Loan Program is specifically designed to help small businesses finance major fixed assets like real estate, buildings, and heavy equipment. Unlike traditional loans, 504 loans are structured through a unique partnership between:

• The borrower (you):typically contributes 10% of the project cost.
• A Certified Development Company (CDC):a nonprofit organization that provides 40%.
• A third-party lender (bank or credit union):covers the remaining 50%.

This setup helps reduce the financial burden on small business owners while giving them access to larger capital at more favorable terms.

SBA 504 Loans vs. CRE Mortgages

If you’re exploring SBA 504 loans, you might also come across Commercial Real Estate or CRE mortgage. CRE mortgages are traditional bank loans used to purchase or refinance real estate used for business purposes. While both options can finance property purchases, there are key differences:

• CRE mortgages often require higher down payments (typically 20%–30%) and may have variable interest rates.
• SBA 504 loans offer lower down payments (as little as 10%) and fixed interest rates for up to 25 years.

For many small businesses, the SBA 504 loan offers a more accessible and stable route to property ownership compared to a conventional CRE mortgage.

Key Features and Benefits

• Loan Amounts: Up to $5 million (or $5.5 million for manufacturers or energy-efficient projects)
• Repayment Terms: Fixed terms of 10, 20, or 25 years
• Interest Rates: Competitive fixed rates, typically 5%–7%
• Collateral: The asset being financed is the primary collateral

This makes the 504 program particularly attractive for businesses investing in long-term growth while seeking predictable payments and low rates.

Who Qualifies?

To be eligible, your business must:

• Be for-profit and located in the U.S.
• Have a net worth under $15 million
• Have an average net income of $5 million or less after taxes for the previous two years
• Use the funds for eligible fixed assets
• Occupy at least 51% of the property (if purchasing an existing building), or 60% if building new

How to Apply

• Find a CDC:Locate one through the SBA’s CDC directory.
• Consult with a lender:A participating bank or credit union will usually handle 50% of the project financing.
• Submit required documentation:Business plans, tax returns, project cost breakdowns, and financial statements.
• Await SBA review and approval:The process typically takes 30 to 90 days.

Recent Program Updates

As of late 2024, the SBA announced several changes to the 504 loan program to make it even more accessible. These updates include streamlined eligibility criteria and improved refinancing options, making it easier for small businesses to lower their existing loan payments and access capital for expansion.

Is an SBA 504 Loan Right for You?

If your business is planning to buy property, upgrade equipment, or expand facilities — and you want fixed rates, longer terms, and lower down payments — the SBA 504 Loan could be your best financing option.

To get started, consult a Certified Development Company in your area or visit the official SBA 504 Loan page for more information.

Need help navigating the SBA 504 or CRE mortgage options, or want to know about reliable SBA loan lenders? Let us know — we’re happy to connect you with experts who can guide you through every step.

Also Read: What Is an SBA Loan? Everything You Need to Know

California’s 1031 exchange rules are anything but straightforward, and they keep changing. To make smart real estate transactions, understanding them is crucial. Here’s a comprehensive overview of the 1031 exchange rules along with practical tips to help you navigate the process.

What is a 1031 Exchange?

A 1031 exchange, also called a like-kind exchange, allows you to swap one real estate investment property for another—deferring capital gains taxes in the process. Named after Section 1031 of the Internal Revenue Code (IRC), this strategy is widely used by investors, real estate agents, and title companies.

By reinvesting proceeds from a sold property into a like-kind property, you postpone paying capital gains tax. For investors, this is an effective way to grow their portfolio through continuous reinvestment.

Rules for 1031 Exchange in California

• The new investment property must be like-kind to the one being sold. Most business or investment real estate qualifies regardless of quality.
• Both properties must be located in the United States.
• Primary residences or vacation homes do not qualify.
• The replacement property must be of equal or greater value than the one sold.
• The exchange must involve only like-kind property; no cash, stocks, or other forms of payment are allowed. Any difference in value must be paid in cash by the investor.

Why You Need a Qualified Intermediary

A Qualified Intermediary (QI) is essential for executing a valid 1031 exchange. As a neutral third party, the QI holds the sale proceeds and uses them to purchase the replacement property. The investor is not allowed to access the funds directly—doing so invalidates the exchange.

Choose a reliable and experienced 1031 exchange agency. The QI will:

• Prepare all required legal documents
• Hold proceeds in a secure escrow account
• Ensure IRS rules are followed during the transaction

What Is the Exchange Timeline?

Time limits are strict under the 1031 exchange rules:

• 45 Days: From the sale of the original property, you must identify one or more replacement properties within 45 days.
• 180 Days: The exchange must be completed within 180 days after selling the original property or by the due date of your tax return (including extensions), whichever comes first.

Missing any deadline disqualifies the exchange and triggers capital gains taxes.

Taxes Involved in a 1031 Exchange

To fully defer capital gains taxes, follow these financial guidelines:

• Reinvestment Requirement: The replacement property’s purchase price must be equal to or greater than the relinquished property’s sale price.
• Equity Reinvestment: All equity from the sale must be reinvested. Retaining cash will result in taxable gains.
• Debt Replacement: Debt on the new property must match or exceed the debt on the old property. Cash can be used to compensate for any shortfall in debt—but not the other way around.

Call the Experts

A 1031 exchange is a powerful tax-deferral strategy for real estate investors looking to build long-term wealth. But due to its complexity and strict IRS requirements, it’s important to work with a team that understands the ins and outs of real estate finance and property law.

ALT Financial is a full-service firm specializing in 1031 exchanges across California. Our experienced advisors provide end-to-end support—from identifying suitable like-kind properties to coordinating with a Qualified Intermediary and managing timelines to ensure compliance.

We’re not just a 1031 exchange service provider. As a trusted Refinance broker and CRE mortgage specialist, we can help you align your investment goals with broader financial strategies—whether that means refinancing an existing property or expanding your commercial real estate portfolio.

Let ALT Financial guide you through your 1031 exchange with confidence. Get in touch today to learn how we can help you defer taxes, grow your portfolio, and make the most of your real estate investments.

Do you want better loan options? Do you want to avoid overpaying on your mortgage? Without guidance, navigating the complex mortgage process can result in expensive mistakes, jeopardizing your financial situation. Steer clear of such problems by choosing the best mortgage broker California.

A reliable broker does more than just connect you with lenders; they provide advice and reasoning throughout the process. Here is a breakdown of the essential factors you must consider when choosing a mortgage broker. But first:

What is the Role of a Mortgage Broker?

A mortgage broker bridges the gap between lenders and borrowers. They help potential owners locate the best mortgage options aligned with their requirements. They evaluate the borrower’s finances and credit history and, depending on them, search for lenders offering the best terms.

Don’t mistake mortgage brokers for being loan scouts—they are the investor’s partner and will guide you throughout the process. First-timers may find it tricky to understand features like payment holidays and overpayment flexibility, which an expert broker will clearly explain.

A mortgage broker’s expertise increases your chances of getting better terms and rates than those you could manage on your own. They have an extensive network of lenders, which gives them access to a wide variety of loans. Additionally, they are empowered with persuasive negotiation skills, which means better value and rates.

Key Factors to Consider When Choosing a Mortgage Broker

• Experience and Expertise
  The first consideration when seeking a full-service mortgage broker is their track record. The more, the merrier. Also, the variety of loans they have handled plays an integral role in their portfolio. More experience means they have better connections with lenders and are adept at their work, so your chances of securing better deals are high. Don’t hesitate to ask them about their experience.
  Once their experience is comfortable for you, check how well they understand your financial situation and goals and what type of loans they recommend. When a broker knows what suits you, they are likely competent enough to secure the best deals.
• Transparency in Fees
  A mortgage broker generally charges anywhere from 1% to 3% of the loan amount, which is paid by the bank. However, in some cases, the borrower may cover their fees upfront or at the closing. Assess their services to ensure you get the best possible deal. You are better off choosing a broker who helps you save in the long run—for which you might have to pay slightly more.
  Note: Mortgage brokers are legally required to be transparent about their fees and commissions.
• License
  No license – no broker. A mortgage broker must have a license, which ensures they comply with the regulatory requirements and professional standards for operating in this industry.
  A license guarantees that the broker has the necessary education, has passed the required exams, and adheres to ethical guidelines. As a borrower, you will find peace of mind when your broker has a license.
  Note: Verify their license using the Nationwide Multistate Licensing System (NMLS) database or by checking with your state’s licensing authority.
• Communication Style
  Effective communication seals the deal. You need someone who understands you, responds promptly to your queries, and is eager to help you whenever you need. They must be active listeners. You don’t want someone who starts strategizing without knowing your scene.
  While not even the most effective communicator may be your best match, notice how they communicate. They should at least be able to adapt to your preferences as best as they can, and that effort needs to be visible.

Final Thoughts

Choosing a refinance broker doesn’t require focusing on every little detail. While buying or financing a home-buying process can be overwhelming, it is also a beautiful process. You need the right guidance to keep yourself from feeling stressed.

At ALT Financial, we are committed to making this process seamless for you. Our extensive network of experienced mortgage brokers and personalized recommendations will help you connect with those offering the best rates, terms, and overall experience.

When a loved one passes away without establishing a trust, transferring ownership of their property becomes a matter of following legal procedures—typically through probate or a simplified affidavit process. In this article, we’ll explain the key steps, documents, and considerations involved in transferring the title of an inherited property when no trust is in place.

Understanding Inherited Property Outside of a Trust

A trust can simplify asset transfers by bypassing the probate process, but not all estates are set up this way. When property isn’t held in a trust, it remains part of the decedent’s estate and must be legally transferred to the rightful heirs. This process ensures that the property title reflects current ownership, allowing heirs to manage, sell, or refinance the asset without complications later.

The transfer process typically involves:

• Probate: A court-supervised process to validate the will and administer the estate.
• Affidavit of Heirship: In some jurisdictions, a simplified method used when the estate is small and uncontested.

The Probate Process: An Overview

Probate is the legal procedure for resolving a decedent’s debts, validating their will (if one exists), and distributing assets according to the will or state intestacy laws if no will is present. Even if you are named as an heir, the property title will not automatically change hands until the probate process is completed.

Key points about probate include:

• Court Involvement: A probate court officially appoints an executor or administrator to manage the estate.
• Notification and Documentation: The court notifies potential creditors and heirs, ensuring all claims and legal interests are addressed.
• Final Distribution: Once debts and taxes are settled, the court issues an order that allows the executor to transfer assets—including real estate—to the heirs.

For smaller estates or in some states, an affidavit of heirship may be used as an alternative to full probate, especially when there is no dispute over who the heirs are.

Key Steps to Transfer the Title

When transferring the title of an inherited property without a trust, follow these steps:

1. Determine the Method and Probate Requirement

• Review the Will: If the decedent left a will, it will typically specify how the property should be distributed.
• Check Ownership Type: Identify if the property was solely owned, or if it was held in joint tenancy. Properties held jointly with the right of survivorship may pass automatically to the surviving owner without going through probate.
• Decide on the Process: If probate is required, begin the probate process. In simpler cases, an affidavit of heirship might suffice.

2. Gather Essential Documents

Collect all necessary paperwork, including:

Death Certificate: An official copy is required to prove the decedent’s passing.

Probated Will or Court Order: This document confirms the heirs and authorizes asset distribution.

Affidavit of Heirship (if applicable): A sworn statement by a knowledgeable party outlining the rightful heirs.

3. Prepare a New Deed

Draft a new deed to transfer the property title from the decedent’s estate to the inheritor(s). The deed should include:

• Full Legal Descriptions: Include the parcel number and a detailed description of the property.
• Names of the Heirs: Clearly list the full legal names of the new owner(s).
• Type of Deed: Depending on local practices, you may use a quitclaim deed, warranty deed, or another form as required by law.

4. Notarize and Record the Deed

Once the new deed is drafted:

• Notarization: Sign the deed in the presence of a notary public to validate your signature.
• Recording: File the notarized deed with the local county recorder or land registry office. This step updates the public record and formally establishes the new ownership.

5. Pay Applicable Fees

There may be several fees involved, such as:

Filing Fees: Charged by the county recorder or land registry.

Transfer Taxes: Depending on your state or local jurisdiction, you might be required to pay a transfer tax.

Other Costs: These could include fees for document preparation or legal advice.

Important Considerations

• Legal and Tax Implications

Transferring property through probate or by using an affidavit of heirship has tax and legal implications. Without a proper transfer, the property remains in the decedent’s name, potentially leading to issues with property taxes, refinancing, or future sales. Consulting with a real estate attorney or title company ensures compliance with local laws and may help minimize potential tax liabilities.

• Avoiding Future Disputes

Ensuring that the property title is updated correctly can help prevent conflicts among heirs and avoid challenges later on. A clear title transfer reduces the risk of disputes over ownership, which can complicate or delay future transactions involving the property.

• When Professional Advice Is Essential

Because laws vary by state and even by county, working with professionals—such as probate attorneys, title companies, or estate planners—is highly recommended. They can help you navigate the complexities of the probate process, draft the appropriate documents, and ensure that all local requirements are met.

Conclusion

Transferring the title of an inherited property without a trust involves a series of well-defined legal steps—from determining if probate is necessary to drafting, notarizing, and recording a new deed. By gathering the right documents and following local procedures, heirs can ensure that property ownership is updated accurately, avoiding future legal or financial complications.

For more detailed guidance on your specific situation, consider consulting with an experienced probate attorney or title specialist.

Note: This article is for informational purposes only and is not legal advice.

It is never easy to put up with the loss of a loved one, and things can become even more difficult if you inherit a mortgaged property. For most folks, a home is the most valuable asset they have to pass on to their loved ones after their demise. However, the real question is – inheriting a property with a mortgage and what are your options?

There is no point in sugarcoating things. Inheriting a mortgaged property means you have to make a few tough decisions. You can either choose to sell it to pay off the loan or keep it and decide how to manage the mortgage situation. Understanding all available options will help you make the best choice for your situation.

What to Expect After Inheriting a House with a Mortgage?

Usually, most people inherit assets either through a last will and testament or probate. If you inherit a mortgaged property, you have two choices: sell it or keep it and assume the mortgage responsibility. Of course, both decisions have exclusive advantages and disadvantages.

Selling the Asset

Do you need the home? If you have a place to stay, you can sell your inheritance and pay off the existing home loan. Also, keep any remaining cash as part of your inheritance. The best thing about this option is that it frees you from having to worry about the mortgage or maintaining the house. However, you might have to pay capital gains taxes on any money you receive unless you qualify for an exclusion.

Keeping the Asset

If you decide to retain your inheritance, you have to assume responsibility for the mortgage and start making payments sooner rather than later. The Garn-St. Germain Depository Institutions Act lets most heirs assume the mortgage without any closing costs or credit checks. Then again, taking this route means you have to take over the mortgage payments along with the taxes, insurance, and other expenses. Additionally, you will have to oversee upkeep and maintenance.

Also Read: Refinancing an Inherited Property: What You Need to Know

4 Steps to Take After Inheriting a Mortgaged House

Inheriting a property with a mortgage: what are your options? Well, it is a complex situation and needs equally complex solutions. You also need a proper understanding of what you are getting into. Below, you will find a list enumerating and explaining four steps to take after inheriting a mortgaged property.

1. Get in Touch with the Loan Servicer

You have to keep making monthly mortgage payments while weighing your options. If the mortgage payments stop altogether, you will be heavily penalized. You will even be at risk of losing the home to foreclosure.

Therefore, the first thing you need to do is to find out the loan servicer. Reach out to notify them of the death. The mortgage servicer will possibly ask you to provide them with a copy of the death certificate and will. After verifying this information, the servicer can brief you about the remaining loan balance and monthly payments.

2. Calculate the Equity

Before you decide what to do with your inheritance, you have to ascertain its worth. Consider getting the house appraised. It should give you an idea of what price you could list it for on the market.

Once you know the value of the property, you will subtract any first or second mortgages or outstanding liens. The final number you get is the asset’s equity and the amount you can expect to receive after selling it.

Make sure to calculate the potential cost of selling the house as well. For instance, does it need any major or minor repairs before you can put it on the market? Even if no additional work is necessary, you have to pay the closing costs and additional fees if you decide to sell.

3. Consider Your Expenses

If you are planning to keep the house, remember to do the math to determine how much it will cost you. Apart from mortgage payments, you have to think about property taxes, utilities, landscaping, and a few other costs.

While inheriting a mortgaged home can be quite a windfall, it does come with risks. A house needs ongoing maintenance and maybe a few significant repairs. These things will only add to the financial strain. Property inheritances can also have tax implications, such as property tax reassessments and potential capital gains taxes if the house is sold at a profit.

4. Consider Other Heirs

If the deceased willed the entirety of the property to you, you get to decide what to do with it. However, if other beneficiaries inherit a portion of the house, you must work with them to decide what to do. For instance, siblings may inherit the house with a mortgage after a parent dies.

If you wish to move into the property yourself, you can buy out the other heirs of their shares. This process is called an estate buyout, which requires an appraisal to determine the home’s exact value. You and the other heirs can also agree to sell the home and split the remaining proceeds.

Is Refinancing an Option

Inheriting a property with a mortgage: what are your options? You already have a few to consider, but what about refinancing the mortgage? Is that an option, too? Refinancing will prove to be worthwhile only if you can lower the interest rate or make the monthly mortgage payments more affordable.

However, if you decide on refinancing, you have to qualify for it first. It depends on your credit score, debt-to-income ratio, and home equity. If you have planned to sell the house within the next few years, remember that the refinancing costs will possibly outweigh all benefits.

Whatever you decide to do, know that our services can be of great use when you inherit a property with a mortgage. We are ALT Financial Network, Inc., and we can assist individuals who inherit mortgaged property by offering tailored mortgage refinancing solutions. Our licensed mortgage professionals can guide you through options like loan term adjustment or securing favorable interest rates. We will ensure the inherited property remains a valuable asset.

FAQs

Q1. Can a lender force the sale of an inherited property with a mortgage?

A1. In most cases, lenders cannot force the immediate sale of an inherited home. The Garn-St. Germain Act allows heirs to assume the mortgage, preventing foreclosure as long as payments continue.

Q2. What happens if multiple heirs disagree on keeping or selling the property?

A2. When multiple heirs inherit a mortgaged property, disagreements can arise. Options include a buyout of shares, legal mediation, or selling the home and splitting proceeds to resolve disputes fairly.

Q3. Will inheriting a mortgaged home affect my credit score?

A3. Inheriting a home doesn’t directly impact credit scores. However, assuming the mortgage and missing payments could hurt your score, while consistent payments may improve your credit history over time.

Q4. Are there tax benefits to keeping an inherited home?

A4. Yes, heirs often benefit from a stepped-up cost basis, reducing capital gains taxes if sold later. Also, mortgage interest and property taxes may be deductible if the home is retained.

Q5. Can I rent out an inherited home with a mortgage?

A5. Yes, you can rent out an inherited home, but check mortgage terms and local regulations. Some loans require owner occupancy, while rental income may help cover mortgage payments and upkeep costs.