A loan obtained by a limited partnership in which the lender has a claim only against the partnership as a whole, not against the individual limited partners. For tax purposes, if the partnership invests in real estate, the limited partner may include its portion of the nonrecourse loan in its basis. See also: Basis.
Loan that the investor cannot force the lender to repurchase.
A loan taken by limited partners used to finance their portion of the partnership, which is secured by their ownership in the venture.
Price support loan to farmers to enable them to hold their crops for later sale, usually within the marketing year. The loan is nonrecourse in that farmers can forfeit without penalty the loan collateral (the commodity) to the government as settlement of the loan.
In a leveraged lease, the lenders cannot look to the lessor for repayment. The lender's only recourse is to the lessee and, therefore, the lessee's credit rating is of prime importance.
A type of loan in which the only remedy available to the lender in the event of the borrower's default is to foreclose on the collateral; the borrower is not personally liable for repayment.
A loan not allowing for a deficiency judgment. The lender's only recourse in the event of default is the security (property) and the borrower is not personally liable.
A loan for which the borrower is not personally liable (no deficiency judgment is possible).