I am interested in finding a lender that is able to arrange non recourse home lending for investment purposes. I am based in Melbourne. Any referrals would be much appreciated.
cheers
natasha
Hi Natasha,
You can get non-recourse lending against commercial property up to 65% LVR, subject to a few conditions largely relating to the tenant and lease. I don't like your chances with resi property though, specifically because the leases and tenants don't meet the criteria required for waiving guarantees.
Regards
thanks Alistair, I was thinking of a resi IP
cheers
Natasha
Hi Natasha,
Unfortunately you are not likely to have much luck, certainly not with a bank.
Regards
I’m going to make myself look pretty stupid and ask what is non recourse lending and when would you need it?
jmsrachel wrote:I'm going to make myself look pretty stupid and ask what is non recourse lending and when would you need it?In case of a default the lender can only seize the collateral nothing else.
thanks Freckle for your quick response
have a good weekend:)
Some of the broker experts can confirm but all RE lending here is full recourse. The only way to simulate non recourse is to have your assets locked in under another entity and the use of bankruptcy if they're hell bent on taking every last cent. You'll find the wealthy use this ploy or tactic without hesitation.
Makes sense now, thanks Freckle
Yes. i have never heard of a resi non recourse lender. Only for larger commercial deals.
You could possibly use one of the super loans…prob not
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Most of the banks have specific policies regarding non recourse lending (lending with no recourse to the borrower/guarantor(s) in case of default), its not that difficult and the loans don't have to be huge, we did one this week for only $975K for a client. Basically the tenant has to be of reasonable quality (ie something like a doctor, lawyer etc or a largish company, to give the lender some sort of comfort that they are unlikely to disappear or go broke), the term of the loan must be 6 months less than the lease, which can cause some issues when rolling over, and there are certain interest coverage and debt servicing ratios that must be met by the lease on its own, max LVR between 60 & 65%. Some lenders give you a bit of a hit on risk rating, and so pricing, others don't.
Regards
Coming late in on the conversation but as the boys have already said you would never a non recourse standard residential loan.
I think many US states learned a lesson or two on that score post GFC.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
What is your reasoning behind wanting a non recourse loan, out of curiosity ?
Good point wilko i am unsure also.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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