Recourse
Quick answer
Recourse determines whether a lender can pursue the borrower's or guarantor's assets beyond the property itself if the loan defaults.
Most stabilized commercial real estate debt is non-recourse with carve-outs, meaning the lender's remedy is the property unless the borrower commits a 'bad boy' act such as fraud, misapplication of funds, or an unpermitted transfer. Construction loans are frequently full recourse or carry a burn-down structure that reduces the guarantee as leasing and debt-service coverage milestones are met.
Related product: Construction Financing
Related terms
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