UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 1-U

CURRENT REPORT

Pursuant Regulation A of the Securities Act of 1933

February 19, 2019

(Date of Report (Date of earliest event reported))

FUNDRISE INCOME EREIT II, LLC

(Exact name of registrant as specified in its charter)

Delaware	61-1775114
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)
1601 Connecticut Ave., Suite 300, Washington, DC	20009
(Address of principal executive offices)	(ZIP Code)

(202) 584-0550

(Registrant’s telephone number, including area code)

Common Shares

(Title of each class of securities issued pursuant to Regulation A)

Item 9. Other Events

Asset Acquisition

Acquisition of Senior Mortgage Loan – 851 Hart Owner LLC

On February 19, 2019, we acquired a first mortgage loan with a principal balance of $2,750,000, (the “851 Hart Senior Loan”). The borrowing entity, 851 Hart Owner LLC, a New York limited liability company (“851 Hart Owner”), used the loan proceeds to acquire an approximately 6,500 square foot multifamily property located at 851 Hart Street, Brooklyn, NY 11237 (the “851 Hart St. Property”). The 851 Hart St. Property, which was last renovated in 2007, is one building comprised of 6 units. The borrower intends to renovate all 6 units. Per the terms of the purchase and sale agreement, the building is to be delivered vacant, allowing the borrower to commence renovations immediately. Renovations are expected to be complete in approximately 4 months at which time the sponsor expects to lease up the renovated units. Once the units are leased up, the sponsor plans to take out our position via sale or refinance.

851 Hart Owner is managed by the principal of Charney Construction & Development, Samuel Charney (the “Sponsor”). Mr. Charney founded Charney Construction & Development in 2012 as a fully integrated real estate development, construction, and management firm with a focus on developing, owning, and operating first-class residential and commercial real estate in the New York City metro area. Charney Construction & Development manages a diverse real estate portfolio valued in excess of $55 million, which includes approximately 6 residential properties totaling 20 units.

The 851 Hart Senior Loan bears an interest rate equal to the 1-month LIBOR Index + 5.75%, adjusted monthly with a minimum floor rate of 7.50%. A portion of the interest will be paid current, monthly, at a rate equal to 5.0% fixed per annum. The interest will be paid current on a monthly basis through the maturity date, February 19, 2021 (the “851 Hart Senior Loan Maturity Date”). In addition, Fundrise Lending, an affiliate of our Manager and a wholly-owned subsidiary of our sponsor, earned an origination fee of approximately 1.5% of the 851 Hart Senior Loan principal, paid directly by 851 Hart Owner.

There is one 12-month extension period available during the term of the 851 Hart Senior Loan. If exercised, the current portion of interest will increase from 5.0% per annum to 7.0% per annum. The 851 Hart Senior Loan may be prepaid in whole or in part, without penalty, at any time during the term of the 851 Hart Senior Loan after a six month lockout period.

The Sponsor has provided customary springing and carve-out guarantees, as well as completion guarantees.

As of its closing date, the 851 Hart Senior Loan’s loan-to-cost ratio, or the LTC ratio, was approximately 82.3%. The LTC ratio is the amount of the 851 Hart Senior Loan divided by the cost incurred from the property purchase and expected renovations and closing costs. There can be no assurance that such estimated costs will prove to be accurate. As of its closing date, the 851 Hart Senior Loan’s as-renovated loan-to-value ratio, or the LTV ratio, was approximately 80.9%. The LTV ratio is the amount of the 851 Hart Senior Loan divided by an October 2018, third-party appraised as-stabilized value of the 851 Hart St Property. There can be no assurance that such value is correct.

The 851 Hart St Property is located in Brooklyn, NY, a strong submarket of New York City. The 851 Hart St Property is located east of Manhattan across the East River and is located a few blocks from the L train and M train for access to New York City.

Safe Harbor Statement

This Current Report on Form 1-U contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in our Offering Statement on Form 1-A dated August 22, 2018, filed with the Securities and Exchange Commission (“SEC”), as such factors may be updated from time to time in our periodic filings and prospectus supplements filed with the SEC, which are accessible on the SEC’s website at www.sec.gov.  Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in our filings with the SEC. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

SIGNATURES

Pursuant to the requirements of Regulation A, the issuer has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FUNDRISE INCOME EREIT II, LLC
By:	Fundrise Advisors, LLC
Its:	Manager
By:	/s/ Bjorn J. Hall
Name:	Bjorn J. Hall
Title:	General Counsel

Date: February 22, 2019