Real Estate Financing

Key Principal


Key Principals (KPs), also referred to as Guarantors, are individuals or entities involved in non-recourse commercial loans, particularly with Agency lenders such as Freddie Mac and Fannie Mae. They serve as additional parties responsible for meeting specific criteria, including past experience, net worth exceeding the loan amount, and certain liquidity thresholds, to qualify for agency loans.

Use Case

n a real estate syndication seeking an agency loan, the sponsors of the deal are typically considered KPs due to their experience. However, if they fall short of meeting the net worth or liquidity requirements, additional KPs can be brought in to fulfill those criteria.

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