Every bank I talk to wont do non recourse loan under $1,000,000. I hear a lot of talk from experienced MHP owners, talking about only doing non recourse loans. Am I supposed to walk away from a deal if its only recourse? I cant be the only one buying parks under $1,000,000.Has anyone else done a recourse loan, and what are the downsides?
I prefer Non-Recourse.
I do have both.
Recourse loans put your personal assets at risk if the bank has to foreclose and the property is sold at auction for less than you owe. Deficiency Balance.
A Non-Recourse lender is going to want the best possible insurance. Which is more expensive.
Check with your local laws as some states do not allow a deficiency Judgments on purchase money loans.
California is a single action state so the lender on a recourse loan can either take back the property or they can go after you personally. Not both.
One thing to keep in mind. If doing a self-directed IRA for funds, it has to be non-recourse - can’t come back on you personally at all.