We are looking to make a Commercial Real Estate loan and are concerned about the loan being classified as an HVCRA loan.

According to the HVCRA rule one exception to the rule is if the borrower has contributed cash equity equal to 15 percent of the loan’s “as completed” value.

Our Lender's question is does preferred equity count toward the 15% equity. Everything I read on the subject seems to say that it is unclear whether preferred equity would be treated as equity for HVCRE purposes; however the articles are all over 4 years old.

Does anyone have any more recent knowledge, opinions, comments or updates on the question of preferred equity?

Thank you in advance,