Non-Recourse Debt - Why do you need net worth?

[Charlie Cameron]

I’ve been researching Fannie Mae smaller apartment loans. I haven’t been able to figure this out: if the debt is non-recourse, why then does the total net worth of the borrowers have to exceed the loan amount? Is there ANY collateral for the lender besides the property itself?

Can anyone point me to related references? I’ve read about a dozen apartment investing books and listened to hundreds of podcasts. I’m using a local portfolio lender for my apartments currently as the loan amounts aren’t large enough for agency debt.

Thank you for your help! Love this community.