when is a loan issued as non recourse 
whether a debt is a recourse or nonrecourse loan often depends on state law 1some states may require that all mortgages are nonrecourse debt and in the instance of a default lenders cannot pursue a deficiency judgment after collateral has been seized who can qualify for a non recourse loan because non recourse debt poses a greater risk to the lender a borrower may need high credit scores and a low loan to value ratio the interest rates on non recourse loans may also be higher to compensate for the risk 