Bad Boy Carve Outs are provisions in non-recourse DSCR loans that protect the lender in the event members of the borrowing entity conduct themselves in an illegal or fraudulent manner. Bad boy carveouts allow the lender to hold one or more individuals of the borrowing entity personally liable for repayment of the loan.
Bad Boy Carve Outs can be triggered by several different violations of loan covenants, so it is important to read your loan docs carefully and consult your real estate attorney.
Non-Recourse DSCR Loans are cash-flow based loans where personal guarantee is not required.
Bad Boy Guaranties or Bad Boy Guarantees are the same concept as Bad Boy Carveouts.
Removing bad boy carveouts from your loan is unlikely and may depend on several factors: