Read your loan agreement that you signed with the SBA. That is the document that answers your questions, not someone here on the forum.
Typically, with SBA, you promise to repay the loan personally and you agree to the SBA attaching your home as
collateral incase you can not repay the loan. But havnig the house as collateral does not cancel their ability to collect from you personally. The SBA is not a mortgage lender. They did not give you a second mortgage. They provided a loan to you, personally, to finance a business.
I would highly suggest you contact an attorney and be sure to take all your SBA paperwork with you.
Since 99.9% of SBA loans require a personal guarantee, this means that they can pursue you personally for the deficiency. That said, the SBA has something known as the Offer In Compromise whereby you can make a settlement offer for less than you owe. This option is only for people who truly don't have the means to repay the debt, and there is not enough equity in the home to cover your debt
There are a number of items that need to be in place in order to qualify for an OIC, with the 3 most important being that 1) the business has ceased operations 2) all business assets have been liquidated and 3) the offer you make needs to bear a resemblance to amounts that could be recovered via forced liquidation.
There are many nuances to the OIC beyond what I mentioned above, but that the general overview.
hi we had to close our business. had an SBA loan collateralized by our home. We are now trying to sell our home as a "short sale" and just heard back from the bank servicing the loan that the SBA intends to come after us for the difference between the balance of the loan and the proceeds from the short sale. Can they do this? we were under the impression that if they secured a second mortgage on our house that this was the collateral and that was it. we did not think that they could foreclose on the home and also come after us for the unpaid balance of the loan.