As a real estate investor scaling your portfolio, especially with stabilized 5+ unit or mixed-use properties, long-term financing options that limit your personal liability are not just appealing—they’re strategic. This is where the non-recourse loan becomes a powerful tool.
At Federal Hill Mortgage, we specialize in non-recourse Rental Loans designed for experienced borrowers who need flexible, nationwide financing—without personal income documentation or recourse risk.
What Is a Non-Recourse Loan?
A non-recourse loan is a type of debt where the lender’s only remedy in the event of default is to seize the collateral property. The borrower is not personally liable for repaying the debt, unlike with recourse loans, where lenders can go after personal assets.
Non Recourse vs Recourse Loans – Key Differences
Feature | Non-recourse loan | recourse loan |
|---|---|---|
Personal Liability | Limited to collateral | Extends to personal assets |
Common Use | Commercial real estate, syndications | Residential or small multifamily |
Risk to Borrower | Lower | Higher |
Mortgage Insurance | Higher | Lower |
Why Real Estate Investors Choose Non-Recourse Loans
Experienced investors and partnerships, particularly in multifamily or mixed-use properties, often prefer non-recourse loans for several reasons:
- Asset Protection: Your personal assets remain protected even if the deal goes south.
- Ideal for Partnerships/Syndications: Limits exposure among multiple investors.
- Simplified Underwriting: At Federal Hill Mortgage, no personal income documentation is required.
- Confidence in Stabilized Properties: Works well for properties with strong rent rolls and cash flow.
What Properties Qualify for Non-Recourse Financing?
Not every property fits the bill for non-recourse treatment. Here’s what typically qualifies:
- Multifamily Properties (5+ Units): Especially those with consistent occupancy and stable income.
- Mixed-Use Properties: Up to 40% commercial use, provided residential components are stabilized.
- Geographic Flexibility: Federal Hill Mortgage offers these loans nationwide.
Understanding Risks and ‘Bad Boy Carve-Outs’
While a non recourse commercial loan limits borrower liability, it’s not absolute. Most contain “bad boy carve-out” provisions, which allow lenders to pursue borrowers if certain actions occur:
- Fraud or misrepresentation
- Voluntary bankruptcy filing
- Misuse of insurance or escrow funds
These carve-outs ensure ethical and transparent borrower behavior but do not affect ordinary market or operational risk.
Introducing Our Nationwide Non-Recourse Rental Loans
Federal Hill Mortgage offers an investor-centric solution: Rental Loans for 5+ Unit and Mixed-Use Properties featuring:
- Non-recourse structure
- Rates starting in the 6s
- Nationwide lending
- Minimum loan size: $750K
- No personal income docs required
- Up to 40% commercial space allowed
Unlike agency-backed loans with rigid rules and slower processes, our loans are built for speed, flexibility, and investor control.
Who Is This Loan Best For?
Our non recourse rental loan is ideal for:
- Real estate investors or syndicators with a stabilized portfolio
- Borrowers seeking to limit personal liability
- Operators acquiring or refinancing 5+ unit or mixed-use properties
- Investors seeking nationwide access without the red tape
Eligibility Snapshot:
- Property must be income-producing and mostly leased
- Minimum loan amount: $750,000
- Up to 40% commercial use permitted
- Must demonstrate experience or professional management
Ready to Scale Your Portfolio with Confidence?
If you’re an experienced investor looking for long-term, liability-limiting financing, our non-recourse Rental Loans may be exactly what you need.
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