What Mortgage Brokers Should Know About Co-Ownership

Co-ownership is on the rise. With high prices, tight supply, and changing lifestyle priorities, more buyers are teaming up to afford vacation homes together. Whether it’s siblings, friends, or unrelated buyers, group purchasing is no longer niche—it’s growing.

For mortgage brokers, this is an opportunity. But it also requires a different lens when qualifying and advising buyers.

Co-Ownership Is Not a Timeshare

Co-ownership means shared real property ownership, usually via an LLC. It’s not about split time—it’s about split equity, costs, and responsibilities. Most co-owners set up a limited liability company to hold the property and define rights, responsibilities, and exit terms through an operating agreement.

Why Co-Ownership Matters for Mortgage Brokers

It Expands Your Buyer Pool

Many buyers can’t afford a second home alone—but they can with others. Co-ownership helps them combine purchasing power, spread out expenses, and unlock inventory that would otherwise be out of reach.

Financing Is Less Straightforward

Conventional lenders often won’t issue a mortgage directly to an LLC. Most group purchases are funded by one of these methods:

• A residential mortgage issued to individuals (with or without all co-owners named)

• A DSCR or portfolio loan underwritten based on the property’s income

• A cash purchase, with title held in the LLC from the outset

If the group plans to form an LLC later and retitle the property post-close, this introduces risk—especially under due-on-sale clauses in residential loan agreements.

What Brokers Must Ask About Retitling

A key oversight in co-ownership deals: retitling the property to an LLC after financing. It may seem like a formality to the buyers, but to the lender, it could be a contract violation.

The Issue: Due-on-Sale Clause

Most traditional mortgages include a due-on-sale clause, which allows the lender to demand immediate repayment if the property is transferred to another party or entity—including an LLC.

What Brokers Should Do:

• Ask co-buyers upfront: “Do you plan to move the property into an LLC after closing?”

• Advise full disclosure to the lender before transfer. Some lenders allow it under specific conditions (e.g., borrower remains in control of the LLC).

• Encourage planning: Retitling should be intentional and cleared in writing. Surprise transfers create risk for everyone.

Fannie Mae and Freddie Mac guidelines allow certain transfers to borrower-controlled LLCs without triggering due-on-sale—but not all lenders follow suit.

The Role of the Operating Agreement

If your client is buying as a group—especially through an LLC—make sure they have a co-ownership agreement in place. This covers:

• Ownership percentages

• Use schedules

• Expense obligations

• Exit terms (e.g., buyouts, group sale, default process)

Joynt provides these legal structures and decision-making tools, making co-ownership more predictable for brokers, lenders, and clients alike.

How Joynt Supports Co-Ownership

Joynt is not a lender. We help co-buyers set up and manage their ownership structure safely and clearly, including:

• Forming an LLC

• Generating a custom Operating Agreement

• Supporting group decisions, expense sharing, and exit processes

• Making legal, financial, and scheduling workflows manageable

For brokers, that means fewer surprises—and more qualified buyers who are ready to close with confidence.

Questions about how Joynt supports your clients? Reach out to learn more.