True of false – The loan guarantor of a recourse loan in default is not personally liable unless certain carveouts are triggered

The two main types of loans a recourse and nonrecourse.

  • The loan guarantor of a recourse loan is personally liable in the event of a default
  • The loan guarantor of a nonrecourse loan is only personally liable if the reason for the default is fraud or gross negligence
  • Generally, the loan guarantor of a recourse loan receives a higher compensation due to the increased level of risk
  • Click here to learn more about the differences between recourse and nonrecourse debt and the overall process for how an apartment syndicator secures financing for deals