Billy and Alex Resources A Loan With a Financed Property Guarantee

A Loan With a Financed Property Guarantee

From the lender’s perspective, a loan with a financed property guarantee represents less risk than a non-recourse loan because it offers an additional source of repayment in case the underlying collateral is not enough to retire the entire debt balance. Geraci can help lenders determine which guaranty options are best for their loans.

empréstimo com garantia de imóvel financiado , a financed property guarantee requires that the guarantors promise to step in and use their personal assets (cash, accounts, and equity) to repay any remaining loan balance after liquidation of the financed property. This type of guaranty is most common for new construction or renovation projects that have a significant lease-up component.

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For this type of guaranty, the lender will commission an appraisal to confirm that the property is worth the amount being borrowed. In addition, the lender may require that certain bad acts or “recourse events” are prohibited. These typically include a voluntary or involuntary bankruptcy filing, an unauthorized transfer or encumbrance of the property or shares in the borrower, and any attempt to challenge the lender’s enforcement of the loan documents. These limitations are designed to incentivize borrowers and guarantors to act responsibly in order to avoid liability for the full loan balance.

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