Section 910

Borrower, Key Principals, Guarantors, and Principals

Requirements

Except as described below, you must comply with all requirements for the BorrowerBorrowerPerson who is the obligor per the Note. , Key PrincipalsKey PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , GuarantorsGuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and PrincipalsPrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… in Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals.

910.01

Borrower Organizational Structure

Requirements

Any individual BorrowerBorrowerPerson who is the obligor per the Note. must not be a Foreign PersonForeign PersonPerson who is not: a United States citizen; a legal permanent resident; or an entity organized and existing under the laws of the United States of America, or its states or territories.  .

Although a single asset entity is preferred, the BorrowerBorrowerPerson who is the obligor per the Note. may be a multi-asset entity.

Guidance

If the BorrowerBorrowerPerson who is the obligor per the Note. owns multiple assets, then you should obtain and underwrite the Borrower’sBorrower’sPerson who is the obligor per the Note. complete schedule of owned real estate assets.  Your underwriting should include the nature, location, cash flows, outstanding mortgage debt, and contingent liabilities of each asset.

910.02

Co-Tenant Borrowers

Requirements

If a Co-Tenant BorrowerCo-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares. is not an individual or a trust holding title to assets of an individual, each Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. must execute the applicable GuarantyGuarantyPayment Guaranty, Non-Recourse Guaranty, or other guaranty by a Guarantor for the Mortgage Loan. per Part III, Chapter 9: Small Mortgage Loans, Section 902: Key Principal Guaranty Obligation.

A Co-Tenant BorrowerCo-Tenant BorrowerBorrower consisting of tenants-in-common that own the Property in equal or unequal shares.  must be

  • an individual who is not a Foreign PersonForeign PersonPerson who is not: a United States citizen; a legal permanent resident; or an entity organized and existing under the laws of the United States of America, or its states or territories.  ,
  • a single-asset entity, or
  • a multi-asset entity.
910.03

Key Principals

Requirements

You must ensure that any individual Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. is not a Foreign PersonForeign PersonPerson who is not: a United States citizen; a legal permanent resident; or an entity organized and existing under the laws of the United States of America, or its states or territories.  .

910.04

Principals

Requirements

For Small Mortgage LoansSmall Mortgage LoansMortgage Loan with an original loan amount less than or equal to $9 million. , a PrincipalPrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… is any person or entity that holds direct or indirect interests of 50% or more in the BorrowerBorrowerPerson who is the obligor per the Note. .

910.05

Financial Statements

Requirements

You must:

  • obtain
    • a schedule of owned real estate assets, and
    • signed financial statements; and
  • verify liquid assets for the 3-months immediately before the Borrower'sBorrower'sPerson who is the obligor per the Note. loan application by obtaining copies complying with the aging requirements per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals of all
    • bank statements, and
    • investment portfolio statements.
910.06

Net Worth and Liquid Assets

Requirements

You must ensure that:

  • the combined net worth of the BorrowerBorrowerPerson who is the obligor per the Note. and all Key PrincipalsKey PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. equals or exceeds the original principal amount of the Small Mortgage LoanSmall Mortgage LoanMortgage Loan with an original loan amount less than or equal to $9 million. ; and
  • the combined post-closing liquid assets (excluding any Small Mortgage LoanSmall Mortgage LoanMortgage Loan with an original loan amount less than or equal to $9 million. cash-out proceeds) of the BorrowerBorrowerPerson who is the obligor per the Note. and all Key PrincipalsKey PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. equal at least 9 monthly payments of P&IP&IPrincipal and interest on the Small Mortgage LoanSmall Mortgage LoanMortgage Loan with an original loan amount less than or equal to $9 million. .

Guidance

You should:

  • for net worth, consider the impact of current, long-term, and contingent liabilities compared to the Small Mortgage LoanSmall Mortgage LoanMortgage Loan with an original loan amount less than or equal to $9 million. amount; and
  • for liquidity, exclude the following unless you have reasonable justification:
    • retirement funds (such as IRAs and 401Ks); and
    • promissory notes payable to the BorrowerBorrowerPerson who is the obligor per the Note. or a Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , whether secured or unsecured.