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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