Document background
A Real Estate Subordination Agreement becomes necessary when multiple loans exist or are being created against a single property, and lenders need to establish their respective priority positions. This document is particularly common in refinancing situations or when property owners seek additional financing while maintaining existing loans. In the United States, these agreements must conform to both federal and state-specific real estate laws, and they typically detail the terms of subordination, including the specific loans involved, the property description, and the rights of each party in various scenarios such as default or foreclosure. The agreement protects all parties by clearly documenting their positions and rights in the lending hierarchy.
