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Non-Recourse Lending

Debt Financing Overview

  • An account can take on a loan to purchase property
  • The loan must be non-recourse, meaning the only collateral securing the loan is the property being purchased with the loan
    • Other assets held within the account or the account holder personally cannot be held liable in the event of a default on the repayment of the non-recourse loan
  • Mortgage payments of the non-recourse loan held within the account must be paid from the account
    • Bill payments must be submitted to send payment for the mortgage
      • A recurring bill payment can be set up to automatically send payments for the mortgage on a scheduled basis
  • The following must be submitted with your debt-financed real estate purchase request:
    • Real Estate Direction of Investment
    • Non-Recourse Loan Documentation
      • Promissory Note (including verbiage that loan is non-recourse)
      • Deed of Trust/Mortgage
      • All loan paperwork should be signed by the account holder
    • Settlement Statement or HUD showing the correct titling and funding amount along with any documents that will require Equity Trust Company’s signature

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