nonrecourse loan

Definition

A loan secured only by collateral, where the lender cannot pursue the borrower's other assets if the property is insufficient to cover the debt. The 'take the house and leave me alone' mortgage.

Example Usage

His commercial property loan was nonrecourse, so when values crashed, he simply mailed the keys to the bank and walked away without personal liability.

Origin

Commercial lending terminology from mid-20th century structured finance

Fun Fact

While common in commercial real estate, residential nonrecourse loans are rare because lenders want borrowers personally on the hook to discourage strategic defaults.

Source: Commercial mortgage-backed securities lending standards

Related Terms

Intermediate

contingent

In real estate and business, a condition that must be satisfied before a deal becomes final—essentially an escape hatch built into your contract. Common contingencies include financing approval, home inspections, or the buyer winning the lottery. It's the legal equivalent of saying 'I'm in, but only if...' and everyone agreeing to wait and see.

🏠 Real Estate

Advanced

gift of equity

When a seller (usually a family member) sells a property below market value and treats the difference as a down payment gift. It's nepotism in real estate form, and the IRS has feelings about it.

🏠 Real Estate

Intermediate

carrying costs

Ongoing expenses of property ownership including mortgage, taxes, insurance, utilities, and maintenance while holding property for investment. These costs literally 'carry' you financially from purchase to sale, often eating profits investors forgot to calculate.

🏠 Real Estate

Advanced

appurtenant

A fancy legal term for 'stuff that comes with the property,' particularly easements that transfer with the land rather than staying with the owner. It's the real estate equivalent of 'batteries included,' except it's more like 'right-of-way for your neighbor to cross your lawn included.' Lawyers love using this word to make simple concepts sound sufficiently billable.

🏠 Real Estate

Advanced

seller carry-back

When the seller provides financing to the buyer instead of requiring a traditional mortgage, essentially becoming the bank. It's either a creative solution or a sign someone couldn't qualify for actual financing.

🏠 Real Estate

Advanced

bridge loan

A short-term loan that helps you buy a new home before selling your current one, literally bridging the financial gap. It's expensive money that lets you avoid the nightmare of moving twice or living in your in-laws' basement.

🏠 Real Estate

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