Mortgage to Participant

[cathyw]

Can the plan make a loan to a participant, secured by a mortgage, in excess of 50% of account or $50,000?

[Lou S.]

I believe you would need a Prohibited Transaction exemption from the DOL for it to not be considered a PT but I am not an expert in PTs.

[cathyw]

I've since found the reference I was looking for in the Treasury regulations under Section 72(p). The only way to exceed the usual 50% or $50,000 limitations is if the plan maintains a bona fide mortgage investment program, and that could not be limited to only plan participants.

thanks.