Its the ratio they lend to the value of the collateral that secures the loan.

However the seller is asking for collateral.

I promise it will be exhausting getting this type of loan if you don't have any collateral to pledge.

Lending can take place with the property as collateral or it can have other types of assets, such accounts receivable or equipment mixed in.

Make them a loan and take the stuff as collateral, file a UCC form, put them on title with you, when the loan is paid off release the UCC and take your name off title. :)

This can be accomplished by granting mortgages/deed of trust on each property or by cross collateralize the properties.

Too many investors got caught with flips or loan collateral that rapidly decreased in value during our RE crash.

Any equitable interest given in or to a property held as collateral is grounds to call the loan.

A financed option price is done with a note, collateral could be used, you make the payments on the note to pay the full option price.

It's all about trying to generate income for bankrupt cities/counties, and them figuring out a way to use private property owners homes as collateral on loans (in my opinion) because the cities/counties have -0- credit, and are making a hail mary pass to try to get their hands on money, someplace!