Leasehold Estates

Homium closes and funds second lien loans that are secured by properties on leasehold estates in areas in which this type of property ownership has received market acceptance. The mortgage must be secured by the property improvements and the borrower’s leasehold interest in the land.

The leasehold estate and the improvements must

• constitute real property,

• be subject to the mortgage lien, and

• be insured by the lender’s title policy.

The leasehold estate and the mortgage must not be impaired by any merger of title between the lessor and lessee. In the event the mortgage is secured by a sublease of a leasehold estate, the documents must provide that a default under the leasehold estate will not by such default result in the termination of the sublease.