# What is a limited or special purpose property under 504?

**Short answer:** It is a limited-market property whose design, materials or layout restrict it to the use for which it was built. SBA's list includes hotels, gas stations, car washes and nursing homes. The usual structure is 50% third party lender, 35% CDC debenture, 15% borrower.

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Last checked: 2026-11-08

In this answer, CDC means Certified Development Company.

A limited or special purpose property is one with a narrow market. SOP 50 10 8.1 defines it as a limited-market property (App. 3, p. 297). The property has a unique physical design, special construction materials, or a layout that restricts its use.

## Properties SBA lists

The SOP gives these examples and says the list is not all-inclusive (Sec. C, Ch. 1, Para. E.1.e):

- Lodging and recreation: hotels, motels, amusement parks, bowling alleys, golf courses, marinas, sports arenas, swimming pools, tennis clubs, theaters and auditoriums.
- Health and care: hospitals, surgery centers, urgent care centers, other medical facilities, nursing homes and assisted living.
- Vehicles: gas stations, car washes, and service centers with pits and in-ground lifts.
- Land-based: farms, mines, oil wells, quarries, gravel pits, sanitary landfills, wineries and cemeteries.
- Other: cold storage with more than 50% of its square footage refrigerated, dormitories, funeral homes with crematoriums, and railroads.

## What changes

- The usual structure is 50% third party lender, 35% CDC debenture, 15% borrower.
- If the project also involves a new business, it is 50% third party lender, 30% CDC debenture, 20% borrower.
- Third party loans must total at least 50% of project cost (13 CFR § 120.920).
- The appraiser must have experience in the particular industry (Para. E.2.b).

The Certified Development Company (CDC) must state its conclusion on this point in the credit memorandum.

## Sources

- [SOP 50 10 8.1, App. 3 (p. 297)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. C, Ch. 1, Para. E.1.e (Para. E begins p. 242)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. C, Ch. 1, Para. E.2.b (Para. E begins p. 242)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [13 CFR § 120.910](https://www.ecfr.gov/current/title-13/section-120.910)
- [13 CFR § 120.920](https://www.ecfr.gov/current/title-13/section-120.920)