Non recourse construction loan

3 Replies

Hi Jerry,

I would think this has to be rare since non-recourse loans are rare in and of themselves usually requiring larger down payments and higher rates. You could try asking some Self-directed IRA companies as their clients use this type of financing to purchase RE inside their IRA accounts. Anyway, best of luck!!

Dave

@Jerry Alvey Good luck with finding a non-recourse construction loan. Since you are looking for a construction loan, the property is not generating any income, so how do you suppose the lender is going to protect itself for the monthly payments? Non-recourse loans typically require 35%-40% down and the rates will be significantly higher.

@Jerry Alvey It is going to be hard to find a non-recourse construction loan. Most lenders that do non recourse loan, usually focus on income producing properties because it generates revenue that can sustain the debt that was borrowed. Non-recourse loans already have the underwriting criteria pretty tighten up and I am not aware of any lenders that are doing non-recourse construction loans. Jerry, there might be some private or hard money lenders that could do a non-recourse construction loan for you, but keep in mind that the rate and loan-to-value is going to be significantly lower.

Good luck!