Recourse in Relation to FHA 232 Financing
If a loan is recourse and the borrower defaults (fails to repay a loan), the lender can seize both the collateral used in securing the loan and the borrower’s assets which are not used as collateral. Fortunately for borrowers, HUD 232 loans are non-recourse for borrowers, with standard bad boy carve-outs (exceptions for fraud and other bad behavior).
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