Quick answer: A non-recourse multifamily loan generally limits the lender's recovery to the property and pledged collateral if the loan defaults, except for negotiated carve-outs such as fraud, misapplication of funds, prohibited transfers, or bankruptcy-related acts. Non-recourse is powerful, but it is not "no liability."
For apartment investors, non-recourse structure is one of the biggest advantages of agency and institutional debt. Here's how it really works. To see which execution fits your property, reach out or apply now.
Non-recourse does not mean no liability
Loan documents usually include standard "bad-boy" carve-outs. Certain actions can create personal liability for specific losses or, in serious cases, the entire debt. Borrowers should review those provisions with qualified counsel before closing.
Where non-recourse financing is commonly found
Fannie Mae, Freddie Mac, CMBS, life-company, and some debt-fund executions may offer non-recourse structures for qualifying multifamily properties. Local bank and bridge loans are more likely to require partial or full recourse, especially for transitional assets.
What properties and sponsors qualify
Stabilized occupancy, durable net operating income, acceptable leverage, experienced sponsorship, strong liquidity, and a clean ownership structure improve the chance of non-recourse execution. Our multifamily loans program covers the full range of apartment financing.
How to compare non-recourse offers
Compare the carve-outs, cash-management triggers, guarantor requirements, replacement reserves, prepayment, and transfer rights. A loan described as non-recourse can still contain meaningful obligations. If you're new to apartment underwriting, start with how to finance a multifamily property.
Related financing resources
- Multifamily loans — bank, agency, CMBS, and bridge apartment financing
- Fannie Mae multifamily loans — agency non-recourse executions
- Freddie Mac small-balance loans — streamlined smaller apartment loans
- CMBS loans — long-term, often non-recourse conduit debt
Frequently asked questions
Are Fannie Mae multifamily loans non-recourse?
Many Fannie Mae executions offer non-recourse structure with standard carve-outs, subject to program and underwriting.
Are Freddie Mac loans non-recourse?
Many Freddie Mac multifamily executions are non-recourse except for standard carve-outs and transaction-specific requirements.
Can a small apartment loan be non-recourse?
Yes, some agency and other programs offer non-recourse small-loan executions, subject to size and eligibility.
Is a bridge loan non-recourse?
Some are, but many require recourse because of construction, lease-up, or other transitional risk.