Non-recourse commercial mortgage programs, ranked
Fannie Mae, Freddie Mac and FHA apartment loans, CMBS, life company and most debt fund loans are non-recourse apart from bad-act carve-outs. Non-recourse available for most loans above $750,0001, per Fannie Mae's term sheet. Banks usually want a full personal guarantee, while a credit union may waive one: A personal guarantee is not required, but a credit union that skips it must document offsetting mitigants2.
Least personal recourse
How it is ranked: Programs grouped by how much personal liability their standard terms put on the borrower: non-recourse with standard carve-outs first, then partial or burn-off recourse, then programs where it varies by lender, then full recourse. Programs in the same group share a place and are listed by today's indicative rate.
Data: index readings through October 30, 2026; program figures dated January 12, 2017 to November 1, 2026, each listed with its date under Sources. Computed November 1, 2026.
| Rank | Program | Recourse | Indicative rate | Max LTV or LTC | Min DSCR | Who has to approve |
|---|---|---|---|---|---|---|
| 1= | Freddie Mac Optigo conventional loans | Non-recourse (standard carve-outs) | 5.89 to 6.29% 10Y UST + 95 to 135 bps9 | 80% max LTV (7-year+), 75% (5 to under 7 years)8 | 1.25x min DCR8 | 3: Outside rules and reviewers |
| 1= | Fannie Mae DUS multifamily loans | Non-recourse (standard carve-outs) | 5.99 to 6.59% 10Y UST + 105 to 165 bps9 | 80% max LTV1 | 1.25x min DSCR1 | 3: Outside rules and reviewers |
| 1= | Life insurance company loan | Non-recourse (standard carve-outs) | 6.09 to 7.14% 10Y UST + 115 to 220 bps9 | Not published | Not published | 3: Outside rules and reviewers |
| 1= | CMBS conduit loans | Non-recourse (standard carve-outs) | 6.48 to 7.14% 10Y UST + 154 to 220 bps1111 | Not published | Not published | 3: Outside rules and reviewers |
| 1= | Debt fund and mortgage REIT loans | Non-recourse (standard carve-outs) | 6.98 to 7.33% 30d SOFR + 308 to 343 bps1212 | Not published | Not published | 2: The lender's credit committee |
| 1= | Agency supplemental loans (Fannie Mae and Freddie Mac) | Non-recourse (standard carve-outs) | No verified spread | 80% combined LTV at 1.25x (7-year term)13 | 1.25x minimum combined amortizing DCR (terms of 5 years or more)13 | 3: Outside rules and reviewers |
| 1= | C-PACE financing | Non-recourse (standard carve-outs) | No verified spread | Not published | Not published | 3: Outside rules and reviewers |
| 1= | Credit tenant lease financing | Non-recourse (standard carve-outs) | No verified spread | Not published | Not published | 3: Outside rules and reviewers |
| 1= | Fannie Mae Small Loans | Non-recourse (standard carve-outs) | No verified spread | 80% max LTV15 | 1.25x min DSCR15 | 3: Outside rules and reviewers |
| 1= | FHA 221(d)(4) construction loans | Non-recourse (standard carve-outs) | No verified spread | 87% of cost16 | 1.15x DSCR16 | 4: Federal agency review |
| 1= | FHA 223(a)(7) streamlined refinance | Non-recourse (standard carve-outs) | No verified spread | Not published | Not published | 4: Federal agency review |
| 1= | FHA 223(f) multifamily loans | Non-recourse (standard carve-outs) | No verified spread | 87% LTV16 | 1.15x DSCR16 | 4: Federal agency review |
| 1= | Freddie Mac small balance loans (Conventional Small) | Non-recourse (standard carve-outs) | No verified spread | 80% (7-year+ terms); 75% (5 to under 7 years)5 | 1.25x minimum amortizing DCR5 | 3: Outside rules and reviewers |
| 1= | HUD 232 healthcare loans | Non-recourse (standard carve-outs) | No verified spread | 80% (85% non-profit)17 | 1.45x (includes MIP); 1.11x for 223(a)(7) and 232(i)17 | 4: Federal agency review |
| 1= | Mezzanine loans | Non-recourse (standard carve-outs) | No verified spread | Not published | Not published | With another loan |
| 1= | Single-asset single-borrower (SASB) CMBS | Non-recourse (standard carve-outs) | No verified spread | Not published | Not published | 3: Outside rules and reviewers |
| 17= | Commercial bridge loans | Varies by lender | 6.80 to 7.49% 30d SOFR + 290 to 359 bps1920 | Not published | Not published | 2: The lender's credit committee |
| 17= | Credit union commercial real estate loan | Varies by lender | No verified spread | Not published | Not published | 2: The lender's credit committee |
| 17= | Leasehold (ground lease) financing | Varies by lender | No verified spread | Not published | Not published | With another loan |
| 17= | Non-bank DSCR commercial loans (5+ units, mixed-use) | Varies by lender | No verified spread | Not published | Not published | 2: The lender's credit committee |
| 17= | Preferred equity | Varies by lender | No verified spread | Not published | Not published | With another loan |
| 22= | Bank commercial mortgage | Full recourse | No verified spread | Not published | Not published | 2: The lender's credit committee |
| 22= | Commercial construction loan | Full recourse | No verified spread | Not published | Not published | 3: Outside rules and reviewers |
| 22= | Commercial land loan | Full recourse | No verified spread | Not published | Not published | 3: Outside rules and reviewers |
| 22= | Hard money and private commercial loans | Full recourse | No verified spread | Not published | Not published | 1: The lender alone |
| 22= | Owner-occupied commercial mortgage (SBA 504, 7(a), bank) | Full recourse | No verified spread | Not published | 1.15x21 | 3: Outside rules and reviewers |
| 22= | Portfolio and blanket loan | Full recourse | No verified spread | Not published | Not published | 2: The lender's credit committee |
The short answer by lender type
| Lender type | Standard recourse | What you trade for it |
|---|---|---|
| Fannie Mae and Freddie Mac | Non-recourse with carve-outs | Stabilized occupancy, size floors, yield maintenance or defeasance |
| FHA (HUD) | Non-recourse, with carve-outs for bad acts3 | The longest process and a prepayment lockout |
| CMBS conduit | Non-recourse with carve-outs | Rigid servicing after closing, lockout and defeasance |
| Life company | Non-recourse with carve-outs | Low leverage and a strong property |
| Debt fund and bridge | Usually non-recourse on larger loans | Higher rate, exit fees, a business plan the lender believes |
| Credit union | Set by policy; a guarantee is not required by rule | Membership, lower loan limits per borrower |
| Bank | Full personal guarantee is the norm | Faster, more flexible, relationship pricing |
| Private lender | Full guarantee plus extra collateral is common: first mortgage, often with extra collateral, an ownership pledge or personal guarantees | The highest rates |
What the carve-outs still put on you
Non-recourse means the lender’s remedy for an ordinary default is the property. It does not mean the guarantor walks away from everything. Read the carve-out guaranty as carefully as the note.
| Carve-out | Typical consequence | How borrowers get caught |
|---|---|---|
| Fraud or misrepresentation | Liability for losses, sometimes the full loan | An inaccurate rent roll or financial statement at closing |
| Misapplied rents or insurance proceeds | Liability for the amount misapplied | Paying other expenses from rents after a default notice |
| Voluntary bankruptcy filing | Full recourse | Filing to stop a foreclosure |
| Unapproved transfer or new debt | Often full recourse | Admitting a partner or adding a second loan without consent |
| Environmental losses | Indemnity that survives repayment | Contamination found after closing |
| Waste and unpaid taxes | Liability for the loss | Deferring maintenance or taxes in a downturn |
Two terms matter most in negotiation. Ask whether a carve-out triggers liability for the loss caused or for the entire loan (springing recourse), and ask for a cure period on the minor ones.
What non-recourse costs you
Non-recourse lenders protect themselves in the terms instead of the guarantee:
- Size floors. Freddie Mac Conventional Small runs generally $2 million to $10 million. Small loans below agency thresholds usually carry recourse.
- Income tests. Fannie Mae: Stabilized occupancy, typically 90% for 90 days before funding6. FHA 223(f): Stable occupancy of at least 85%3.
- Prepayment. Agency fixed-rate loans use yield maintenance or defeasance. Freddie Mac Conventional Small: Yield maintenance until securitization, 2-year lockout, then defeasance; open final 90 days5. CMBS: CMBS loans can defease only after at least 2 years from the securitization closing, not the loan closing7.
- A single-purpose borrower. The property sits in its own entity with covenants that keep it separate from your other assets.
- Reserves and cash management. Replacement reserves are standard, and a CMBS loan can sweep cash if coverage falls.
When accepting recourse is the better deal
| Situation | Why recourse can win |
|---|---|
| The loan is below agency and CMBS size floors | Recourse lenders are the market for small loans |
| You may sell or refinance within a few years | Bank step-downs and open prepayment beat yield maintenance |
| The property is in transition | Bridge and bank lenders lend on the plan; non-recourse permanent lenders want stability |
| You need to close fast | Banks and private lenders decide in house |
| You want a relationship lender for future deals | A bank that knows you will extend or restructure more readily |
If you take recourse, negotiate its shape: a guarantee limited to a percentage of the loan, a burn-off once coverage or leverage targets are met, or a guarantee from the entity rather than you personally.
How the ranking groups programs
Every program’s recourse type comes from its own data file, which cites the term sheet or regulation where one exists. “Varies by lender” means the program itself does not fix the answer: credit union policy, debt fund structure and preferred equity terms differ deal to deal. The recourse or non-recourse guide walks through the decision for your own deal.
Questions people ask
Does non-recourse mean I can never be personally liable?
No. Every non-recourse loan names carve-outs that make the guarantor liable for losses, or for the whole loan, if certain things happen: fraud, misapplied rents, voluntary bankruptcy, an unapproved transfer and environmental problems are the usual list. You sign a carve-out guaranty and an environmental indemnity at closing even on a non-recourse loan.
Can I get a non-recourse loan under $1 million?
It is hard. Fannie Mae offers non-recourse terms for most loans above the threshold in its term sheet, and Freddie Mac's Conventional Small runs generally $2 million to $10 million. Below that, credit unions are the most likely to limit or waive the guarantee, and some non-bank investor lenders lend to an LLC with a limited guarantee.
Why does a bank want my guarantee when the property is strong?
Recourse is part of how a bank prices and approves the loan. It keeps the borrower engaged if the property struggles, and regulators look at the support behind a loan when they review it. A strong sponsor can sometimes negotiate a guarantee that burns off once the property meets a coverage or leverage test.
Related
Sources
- Fannie Mae Multifamily, Conventional Properties Term Sheet, retrieved November 1, 2026
- eCFR, 12 CFR Part 723 (NCUA Member Business Loans; Commercial Lending), as of January 1, 2017
- HUD MAP Guide 4430.G (2020 MAP Guide, revision March 2021), as of March 19, 2021
- Sachem Capital Corp. Form 10-Q for the quarter ended June 30, 2026 (SEC EDGAR), as of June 30, 2026
- Freddie Mac Multifamily, Optigo Conventional Small Term Sheet, as of April 2026
- Fannie Mae Multifamily, DUS Mortgage Loans Term Sheet, retrieved November 1, 2026
- BANK5 2026-5YR24 prospectus (Form 424B2), SEC EDGAR, as of August 20, 2026
- Freddie Mac Multifamily, Optigo Fixed-Rate Loans Term Sheet, as of April 2026
- Northmarq, Rates & Spreads (Multifamily Conventional), as of October 22, 2026
- Nassau CorAmerica, Commercial Mortgage Loans: An Attractive Investment Strategy (2026 white paper), restating ACLI Commercial Mortgage Commitments, as of January 1, 2026
- CRED iQ, CRE Loan Spreads Tighten Across Property Types (Apr 17, 2026), as of March 31, 2026
- Blackstone Mortgage Trust 10-Q, Q3 2026, as of September 30, 2026
- Freddie Mac Multifamily, Optigo Supplemental Loan Term Sheet, as of November 2025
- PACENation, What is PACE Financing?, as of November 1, 2026
- Fannie Mae Multifamily, Small Mortgage Loan Program Term Sheet, retrieved November 1, 2026
- HUD Mortgagee Letter 2025-03, Multifamily Changes in DSCR and LTV/LTC, as of January 8, 2025
- HUD Handbook 4232.1, Section II Production, Chapter 3 Loan Sizing, as of January 12, 2017
- HUD Handbook 4232.1, Section II Production, Chapter 2 Program Overview, as of January 12, 2017
- KKR Real Estate Finance Trust 10-Q, Q3 2026, as of September 30, 2026
- Granite Point Mortgage Trust 10-Q, Q2 2026, as of June 30, 2026
- SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (effective Oct 1, 2026), as of October 1, 2026
How we check figures: methodology and editorial policy.