My attorney said the personal guaranty on a residential deal is "standard" and I almost let it go

The carve-out surviving a deed in lieu is the part worth dwelling on, because that particular structure effectively eliminates one of your main soft-landing options. A deed in lieu is supposed to let both sides close the book. When the guaranty survives it, you have handed the lender a deficiency claim without the procedural friction of foreclosure, and that is a meaningfully worse position than most borrowers realize they have agreed to.

The distinction you draw between payment and completion guaranties is the right place to start, and I would add a third variable that does more damage than either: whether the guaranty is joint and several in a multi-borrower structure. If you are co-sponsoring with a partner and the guaranty is joint and several, the lender can pursue you for the full deficiency regardless of your ownership percentage. The split on the operating agreement is irrelevant to the lender. That assumption, that liability tracks ownership, is what I see cause the most damage when a deal turns.

The burnoff threshold question you raised matters, but the mechanism matters as much as the number. Some burnoffs trigger at a fixed LTV, some require a trailing DSCR period, some require both simultaneously. A guaranty that looks like it burns off at 65 percent LTV may have a DSCR condition attached that never gets satisfied in a flat-rent environment, so it never actually burns.

One risk you did not mention: the carve-out language around "bad boy" acts. Most recourse carve-outs in residential commercial financing include voluntary bankruptcy as a triggering event. In a distressed scenario, the moment you consider bankruptcy protection, you may simultaneously trigger full recourse. That is the position where the legal structure of your exit and your liability exposure are directly opposed, and you need a restructuring attorney in that conversation, not a transactional one.

What was the loan structure, agency, bank portfolio, or DSCR product? That changes which carve-outs are negotiable and which are essentially fixed.

This is genuinely useful, and I want to make sure newer members can follow it.

A personal guaranty is a promise you sign that says: if the deal goes wrong and the property sells for less than the loan, you personally cover the gap. It is not limited to what you own inside the deal. It reaches your personal savings, your other assets, whatever you have.

The distinction you drew between a full payment guaranty and a completion guaranty matters a lot and rarely gets explained clearly. A completion guaranty applies mainly in construction or renovation deals. It says you will make sure the project gets finished. A full payment guaranty says you will make sure the entire debt gets paid, which is a much larger exposure and a much longer obligation.

The burn-off point you mentioned is the threshold where the guaranty shrinks or disappears, usually tied to how much equity the property has relative to the loan. No burn-off means it stays in place regardless of how well the asset performs.

The carve-out that survives a deed in lieu is the part that would catch most people off guard. A deed in lieu is when you hand the property back to the lender voluntarily to avoid foreclosure. Most people assume that ends their exposure. A carve-out written to survive it means the lender can still come after you personally afterward.

For anyone doing a deal with commercial financing on a residential property: a licensed real estate attorney reviewing the actual document, before closing, is the right step. Not a summary of it.

What type of deal was the refi on, a single-family buy-and-hold or something with a more complicated structure?