Equity participation entails property owners selling an interest in their property to an investor, who, in return, provides capital or financial support. It enables property owners to unlock capital without relinquishing full control.
Income participation, also known as a participation mortgage, describes a loan where the lender is entitled to a portion of the income produced from the real estate property in addition to receiving interest payments. This shared income could come from property rents or the sale of the property.
Lender participation refers to the scenario where multiple lenders jointly provide financing by sharing the credit risk and loan proceeds of a single transaction, commonly seen in participation mortgage structures.
