Single-Asset Entities and the HUD 223(f) Loan Program
A single-asset entity is typically a limited liability company (LLC) that owns real estate but has no other assets. Single-asset entities, or SAEs, are designed to limit liability for both borrowers and lenders. They are especially helpful to lenders, because, if a borrower personally declares bankruptcy, but they own property via a single-asset entity, the property will not be involved in the bankruptcy. This means the lender can foreclose on the property without any legal restrictions. HUD 223(f) lenders typically require that properties be held by a single asset entity.