Borrower Raising Equity? A Lender and Broker Checklist

When a borrower says "I will raise the down payment from investors," the loan now depends on a second process the lender does not control: a securities offering. A lender or mortgage broker can keep the closing on schedule by asking a short list of questions early: who the key principal is, how the buying entity will be owned, which securities exemption the raise uses, where investor money will sit until closing, and when it will arrive. This post gives that list. It also explains how DoorRaise, a platform that runs the raise for sponsors, fits with a loan closing.

This post is part of our guide to real estate syndication. It is written for lenders, mortgage brokers and borrowers. Rules are as of October 2026.

What should you ask a borrower who plans to raise equity?

Question	Why it matters
Who is the key principal and the guarantor?	The lender underwrites the sponsor's experience and finances, not the investors'. See loan guarantors.
How much equity is needed, in total, and how much is the borrower putting in?	Sets the raise size. See sources and uses.
Is the equity committed or only hoped for?	A commitment in a signed subscription is different from a conversation.
Which exemption is the raise using?	Determines how investors can be found and verified. See 506(b) vs 506(c).
Where will investor money be held until closing?	It should be a third-party escrow. See syndication escrow.
What is the minimum raise, and what happens if it is not met?	If the raise fails, does the deal fail? See minimum raise.
What is the timeline to the first wire and to closing?	See the syndication timeline.
Who will own the buying entity?	Drives the borrower structure and any required identification.

How do beneficial ownership rules touch the loan?

Banks that make the loan must identify the individuals who own 25 percent or more of a legal entity customer, plus one person who controls it, under the Customer Due Diligence rule: 31 CFR 1010.230. A syndication that spreads ownership across many small investors may have none above the threshold, but a few large investors can. Ask early who the larger investors could be. Lenders and agencies may add their own requirements, so check your own credit policy. Our post on beneficial ownership reporting covers the separate FinCEN requirement and its current status.

What does "equity in escrow" mean, and why ask?

In a properly run raise, investors sign subscription documents and wire money to an escrow account in the deal company's name. The money is released at closing, and returned if the deal does not close. This protects investors and shows the lender that the borrower's equity is real. Ask for the escrow agent's name and the bank, and for confirmation of balance as closing approaches, in line with your own policy. On DoorRaise, escrow is at Enterprise Bank & Trust, an FDIC-insured bank, and the funds are released only when the raise closes. See how closing day funds flow.

What are the warning signs?

The borrower cannot name the securities exemption or says "we don't need one."
Investors will send money to the borrower's personal or operating account.
The raise has no minimum, no deadline or no escrow.
The plan depends on one or two investors whose commitment is verbal.
The borrower promises investors specific returns. Promises of returns are a red flag for investors too. See syndication red flags.
The timeline assumes investor money arrives on closing day with no time for filings and wires.
The borrower plans to pay a finder a percentage of the equity raised. See paying capital raisers.

What can you do about timing?

Equity raised from investors needs time for documents, signatures, accredited investor confirmations and wires. A rough sequence is: documents ready, investors invited, subscriptions signed, wires into escrow, then closing. Ask the borrower for a dated plan and check it against your rate lock, due diligence and closing dates. If the plan is tight, extending the closing date early is better than at the last minute. When a borrower cannot raise the equity in time, your options include a smaller loan, a co-sponsor or a delayed closing; that is a business decision between you and the borrower.

How DoorRaise fits with a closing

DoorRaise is a technology platform, not a law firm, broker-dealer, investment adviser or funding portal. It runs the raise for a sponsor: it forms the buying company, generates offering documents, runs e-signatures and accredited investor checks, tracks wires into escrow and files the Form D and state notices. By default it registers only in the property's state; an investor from another state pays that state's filing charge at cost with their investment. The sponsor pays $1,500 to set up (non-refundable), $5,000 at closing (only if the deal closes) and $3,500 a year. A lender or mortgage broker can join the referral program: for each sponsor who pays the setup fee, DoorRaise pays $500 in cash, and the sponsor takes $500 off. That fee is never tied to a loan, a loan closing, or whether a deal closes, and DoorRaise does not pay for investors. Details are on the partner page for lenders. Investing can lose money, and nothing here predicts a result.

Raise your apartment deal from the people who already follow you.

DoorRaise is built for apartment buildings with 5 or more units: one link for the deal, escrow until closing and a standard fee card.

Launch a deal See the fee card

If a borrower of yours is raising equity, they can create a sponsor page.

FAQ

Can a borrower use investor money for the down payment?

Yes, if the lender's program allows equity from outside investors, which is common in syndications. The borrower must follow securities law for the raise, and the lender applies its own policy on who must sign or guarantee.

Does the lender need to see the offering documents?

That is up to the lender's policy. Lenders commonly ask for the operating agreement and an org chart, and may ask for evidence that equity is committed or in escrow.

Who holds investor money before closing?

It should be an independent escrow agent or bank, in the deal company's name. It should not be the borrower's personal account.

Can a lender or mortgage broker be paid for referring a borrower to a platform?

A flat fee for referring a sponsor to a service, not tied to the loan, is different from pay tied to the loan or to investors. Check your own licensing and disclosure rules, and your state's mortgage broker rules, before you accept any fee.

What if the raise falls short?

The borrower's options include a smaller deal, a co-sponsor, or a later closing. Ask what the minimum raise is and what happens if it is not met.

Sources

This article is general information, not legal advice. Lending policies, licensing and securities rules depend on your facts and state, so talk to your own counsel. Information is as of October 2026. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.