In real estate finance, a non recourse loan is a loan in which the lender’s only security for repayment is the property pledged as collateral. If the borrower defaults, the lender may take possession of the property but cannot seek a deficiency judgment against the borrower for any remaining balance.
Non recourse loans are commonly used in certain commercial real estate transactions and are typically associated with stricter underwriting standards or higher interest rates. By limiting the lender’s remedies to the property itself, this type of loan reduces the borrower’s personal liability beyond the value of the secured real estate.
