Guarantor On Non-Recourse Loan?

[Jimmy Klein]

We are looking at taking a 70% LTV loan. Total loan amount is around $3,400,000. Regarding the equity portion, we already have investors who are committing their money. The loan is non-recourse, but the issue is that since we are the sponsor, we are required to still show personal financials. What is typically considered a good guarantor on a loan this size? My net worth is less than $150k, but credit rating is fairly good. Any former bankers here or anyone that has dealt with non-recourse loans?

[Carlos Flores]

A buck fifty networth is not going to cut it. Like Bill said, not enough information. You'll likely need a larger percentage, possibly half ... plus they may want to see coverage for reserves, etc. There's also the fact that they want to protect themselves from bad-boy provisions that could trigger full recourse. And, of course, the possibility exists they may want nw equal to the debt anyway if you have an insufficient track record. Although, I don't know why they'd agree to NR if you don't have that.

What is this loan for? If it's MF, you can get a fannie mae 80% LTV NR loan if the asset is stabilized. Networth in this case would be post closing liquidity equal to or greater than 6mo of debt service. The KP would need significant experience and be able to demostraite sucessful operation and management.