A default is any breach of a loan covenant (missed payment, covenant breach, misrepresentation). An event of default is a default that has matured into one giving the lender remedy rights, typically after notice and any applicable cure period have elapsed. Acceleration and foreclosure require an event of default.
Why does the distinction matter?
Lender remedies are tied to events of default, not bare defaults. A monetary default that the borrower cures inside the cure window never matures into an event of default and never triggers acceleration. Sponsors should always know exactly which cure windows apply to which covenants under their loan.
What cure windows are typical?
Five business days for monetary defaults, 30 days plus a reasonable extension for non-monetary defaults that are susceptible of cure, and immediate event of default for fraud, bankruptcy, and certain insurance lapses. Some loans have no cure period for material misrepresentations.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1